Just imagine it Canada: a day of free shipping for online purchases. Though common stateside, it's an emerging concept on this side of the border thanks to one ex-patriot. No doubt consumers will embrace it but will Canadian retailers do so en masse?
The idea was introduced north of the border last spring, when outdoor apparel and equipment retailer L.L. Bean Inc. announced it would ship all orders for free to Canada with no minimum purchase required. American merchants have offered free shipping for U.S.-based online purchases since the beginning of the 2008 recession, but it's only been in recent months that Canadian organizations are starting to follow suit.
All hail Free Shipping Day Canada -- or FreeShippingDay.ca -- a one-day event on Dec. 12 that aims to give consumers a wide variety of merchants with free shipping and delivery by Christmas Eve (Dec. 24).
It was Canadian-born Luke Knowles, CEO of Windsor, Colo.-based Kinoli Inc., who saw an opportunity to help both merchants and consumers escape the economic doldrums as the recession took root. By 2010, the event generated over US$942 million in online sales, leapfrogging over Black Friday's online sales by an estimated $300 million, and in-turn becoming the third-heaviest online shopping day in U.S. history.
"I saw statistics that said shopping peaks in early December and I thought 'wow, that's way too early' for where online sales should be. So I came to the conclusion that shoppers must be concerned their orders wouldn't get to them in time for Christmas," he explains. "Thus I combined free shipping, which is a popular promotion in the U.S., and a promise of delivery by Christmas Eve and a whole bunch of merchants got on-board with it."
Entrepreneur magazine asks if it's worthwhile for small businesses to hop aboard participating in Free Shipping Day. It mentions, "while Free Shipping Day virtually guarantees a bump in sales, it's no free lunch: Eating the cost of shipping can get expensive."
Knowles says online shoppers love free shipping and that it's the No. 1 promotion they respond to. "It's going to take some time and what'll help drive it is competition," he acknowledges. "Yes, the merchants have to pay for the shipping but it also gets eyeballs to their websites and it increases sales."
Canuck merchants interested in participating can register to do so by filling out a form on FreeShippingDay.ca.
"Last year, we saw a 61 per cent increase (in online shopping in the U.S.) over the year before," he says. "We wanted to introduce it sooner (in Canada) but we didn't think the retail climate was right for it. Now it seems that online shopping in Canada is taking off and it's becoming more important to retailers so this year seemed like the right time to start it."
Knowles also cites a Forrester Research survey of North American online shoppers released in July 2010, "75 per cent of participating consumers said they would shift to another retailer at checkout if shipping was not free."
Current e-retailers involved in Free Shipping Day Canada include Roots, Toys 'R Us, The Gap, Old Navy, SportCheck, Under Armour, Peoples Jewellers, Indigo Books, Apple and Dell. Knowles adds he anticipates 50 to 100 Canadian merchants will be involved on Dec. 12.