Can Retailers Take the Free Out of Shipping?

[mandy]

Tucked away inside the wave of enthusiasm over the strong 2005 holiday shopping season -- which saw sales exceed forecasts while shoppers expanded their buying to new categories -- is a slight complication that could trip up some retailers hoping to turn those great sales into great profits.

One of the big drivers of online shopping was free shipping, which was being offered across the Web -- but those giveaways tend to grind down profit margins, especially when they aren't keyed to a significant minimum purchase size, as was the case in the run-up to Christmas 2005...

"A lot of merchants were so eager to drive online sales this year that they eliminated thresholds," Nielsen//NetRatings senior analyst Heather Dougherty said. "It's a dangerous game, and consumers are likely to get hooked on that again. Next year, they'll ask, 'Why should I spend $75 now when you gave it to me for free last year?'"

Free shipping may be just one more item in the arsenal of tools to convert shoppers to buyers, but retailers are increasingly aware of the need to use it judiciously, much as they would any other discount or promotion -- as part of a larger strategy to drive qualified traffic.

full article: http://www.ecommercetimes.com/story/bBO5...ping.xhtml