Connect to share and comment

Consumers are winning the tug-of-war over free shipping

Thanks to Amazon, consumers now expect free shipping from more online retailers.

Free shippingEnlarge
People wait on line to mail packages ahead of the Christmas holiday at the James A. Farley Post Office in Manhattan. (Mario Tama/Getty Images)

Consumers and online retailers have long been engaged in a tug-of-war over free shipping.

Shoppers expect to get their goods delivered for free because sites like Amazon offer it, but businesses say their profits take a hit when they have to pay for postage.

But many retailers are realizing that in order to be competitive, they have to put free shipping on the table, according to Chad White, research director for marketing software company Responsys.

About 65 percent of retailers will offer free shipping with some conditions, compared with 55 percent last year, White said.

While many retailers used to offer free shipping with a certain minimum as an incentive for shoppers, they're now having to take away the minimum altogether.

More than 44 percent of businesses will offer free shipping with no conditions on Cyber Monday, up from 12.5 percent last year, according to a Shop.org survey.

The same survey shows that 55 percent of online shoppers expect free shipping.

"During the holiday season, free shipping with a minimum has become an expectation, not an incentive," White said.

The question is whether retailers will be be able to continue to afford free shipping. Many have said they build the cost back into products in order to make money.

More from our partner, Business Insider:

Business Insider: Here's How Mercedes-Benz Tested Its New Self-Driving Car

Business Insider: 5 Essays That Got People Into Harvard Business School — And Why They Worked

Business Insider: Half Of All Black Friday Shoppers Won't Set Foot In An Actual Store

Business Insider: HP's CFO Tried To Stop The Company From Spending $11 Billion On Autonomy

Business Insider: 6 Scientific Facts That Every Republican Politician Should Know

Original Source URL: 
http://www.businessinsider.com/retailers-are-offering-free-shipping-2012-11

http://www.globalpost.com/dispatch/news/business/global-economy/121120/consumers-retailers-free-shipping-amazon