A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
Online retailers are lowering free shipping minimums or eliminating them altogether.
Some of the largest e-retailers are lowering shipping minimums, or eliminating minimums entirely, going into the early weeks of the holiday season, according to an Internet Retailer canvas of the Top 100 e-retailers.
Yesterday, Walmart.com, No. 6 in Internet Retailer’s Top 500 Guide, made headlines when it announced free standard shipping with no minimum purchase required through Dec. 20. The promotion departs from the shipping strategy used last year, when the retailer only periodically offered discounted home delivery beginning Nov. 16.
Wal-Mart Stores Inc. joins other multichannel retailers, including Neiman Marcus (No. 41) and L.L. Bean (No. 24), that have announced the season-long availability of free shipping for online orders with no minimum. Neiman Marcus offered the same promotion last season. Last holiday, L.L. Bean required a $75 minimum purchase to get free shipping; that promotion also wasn’t announced until the week of Nov. 30. This week, Saks Direct (No. 45) eliminated a minimum purchase requirement for orders through Nov. 18. Just last week, the minimum purchase amount to qualify was $150.
“What retailers have been doing every year is to get the season started a little earlier. This year some retailers started Halloween weekend. And if everything is starting early, it makes sense that shipping is starting early,” says Fiona Dias, executive vice president of strategy and marketing at e-commerce operator GSI Commerce, says. “And every retailer on the planet has known for awhile that customers hate to pay for shipping.”
Other retailers that did not offer free shipping at any price point as late as last week started to do so this week. American Eagle Outfitters, a GSI Commerce client and No. 51 on Internet Retailer’s Top 500 Guide, is offering free shipping with no minimum through Nov. 14. Oriental Trading (No. 57) is offering free shipping on purchases of $75 or more. Last year, Oriental Trading only sparingly offered free shipping on select days; it was first offered Dec. 10.
Some retailers this week also began offering free shipping for particular items or offered coupon codes if consumers met certain criteria. Fruit and gift purveyor Harry and David Holdings Inc. (No. 84) this week eliminated the $5.95 charge normally required for each shipment on its Fruit of the Month Club. Last year, the company waited until December to offer the same waiver. Meanwhile, apparel retailer Eddie Bauer (No. 86) is offering three coupon codes for free shipping. One code is good for orders of all sizes but is available only to Eddie Bauer credit card holders. A second code grants free shipping on orders of $50 or more if the consumer joins an Eddie Bauer loyalty program. A third code offers free shipping on orders of $100 or more and is available to all.
Research released last month by e-commerce service provider MarketLive Inc. shows 92% of online shoppers say free shipping promotions will influence their buying decision this holiday season.
“People have an emotional blind spot around free shipping and if you don’t offer it in some form, it is hard to recover those customers,” says Charles Nicholls, founder and chief strategy officer of SeeWhy Inc., an e-commerce marketing consultancy.