Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Macy’s joins a growing list of retailers offering variations on the free shipping theme.
To sum up Macy’s new attitude toward free shipping: To beat ‘em, join ‘em.
Macy’s Inc. will begin shipping all online orders at Macys.com of $99 or more for free tomorrow. Most orders that fall below that threshold will be shipped for an $8 flat fee, the company says.
The new free and reduced rate shipping options from Macy’s is the latest in a series of initiatives from big online and multichannel retailers to match the success of Amazon Prime, which charges subscribers a $79 annual fee for free standard shipping on all purchases made directly from Amazon.com.
“In response to requests from our loyal customers, we are implementing this extremely user-friendly shipping policy that does not require special codes and is available every day of the year, not just during promotional periods or holidays,” says Peter Sachse, chief marketing officer at Macy’s, No. 20 in the Internet Retailer Top 500 Guide. “We think our customers will enjoy the savings and convenience of this special offer.”
Free shipping also applies to beauty products, with free shipping for purchases of over $50. Customers spending less than $99 on apparel, jewelry and home goods can have orders shipped for the flat fee of $8.
Exceptions to the free shipping policy include larger and heavier items such as furniture, rugs and mattresses, which can require additional charges, Coach brand products, items shipped to U.S. territories or APO/FPO addresses, and Macy’s store purchases. Free shipping also excludes gift wrap charges, purchases of gift cards or tax. The policy only applies to standard shipping to one location, Macy’s says.
Macy’s is the most recent in a growing number of companies looking to make some form of free shipping a permanent marketing advantage. For example, Sears Holdings Corp. (No. 8) offers free standard shipping on all purchases to Sears.com and Kmart.com shoppers for a $79 annual fee.
Multi-retailer partnerships also offer free shipping in a similar fee-based model. For instance, FreeShipping.com, a members-only program for online shoppers that offers year-round free shipping and other services, announced today that its “premier merchant” roster has grown to 225 retailers. These merchants provide their FreeShipping.com member customers with free shipping at checkout. Among 50 new retailers added in the past 12 months are bookseller Alibris (No. 116), a division of Monsoon Commerce Solutions and shoe retailer Footsmart.com, part of Benchmark Brands Inc. (No. 183). Members pay a monthly fee of $12.97 to get free ground shipping from participating FreeShipping.com retailers.
In addition, ShopRunner offers a free shipping program for online consumers willing to pay $79 per year. Members receive free two-day shipping and free returns from participating merchants. Recently added ShopRunner member retailers include Calvin Klein, Dick’s Sporting Goods (No. 130), Major League Baseball’s MLB.com (No. 179), Borders (No. 194), PetSmart.com (No. 281) and Eastern Mountain Sports (No. 422).
ShopRunner, which is backed by e-commerce technology provider GSI Commerce Inc., aims to compete with the Amazon Prime program and charges the same fee, $79 per year. Amazon Prime, which originated the $79 annual fee concept, makes products eligible for free two-day shipping on most items sold by Amazon (No. 1).