Toronto insurance broker Sarina Schepisi loves online shopping, but hates delivery costs: precisely the consumer mentality that is driving retailers to offer perks, including campaigns like Thursday's holiday-driven Free Shipping Day Canada.
Schepisi, for one, is a busy mother of three who prefers the convenience, comparison-shopping ease and variety of Internet shopping. In an interview, the 48-year-old says she’ll rarely buy an item if it means paying“$20 or $30 for shipping, but if I really want it and I can't get it anywhere else, I’ll think about it.” For her 12-year-old daughter, for instance, she recently paid $119 for a pair of moccasin boots –with no cost for shipping - that go for nearly $200 in-store.
“Free shipping is the No. 1 promotion that shoppers respond to,” says Regina-born Luke Knowles, the U.S.-based Internet marketing businessman who started Free Shipping Day in the U.S. six years ago (this year it’s Dec. 18) and Free Shipping Day Canada in 2011.
Knowles, who is also behind FreeShipping.ca and FreeShipping.org, which run year round, got the idea for a special day of free deliveries after his research found online shopping was peaking earlier than it should, he says on the phone from his Fort Collins, Colo., office. He figured it was because consumers were worried they wouldn’t get their items delivered in time for Christmas.
Knowles says the number of merchants participating in U.S. Free Shipping Day has grown from 250 in its first year to about 10 times that total in some years. According to comScore, the 2012 U.S. Free Shipping Day amounted to US$1.01 billion in spending, a 76 per cent growth rate compared to 2011.
In Canada, with holiday spending expected to grow for a third straight year, according to the 2013 BMO Holiday Spending Outlook, and an anticipated jump in online shopping for the season, this year’s Free Shipping Day Canada has attracted about 260 big-name and independent retailers (including U.S.-based ones), an increase over the 250 who participated in 2012, when 80,000 consumers accessed the special website.
Regardless of who pays the shipping, delivery demands this time of year are growing, and Carley Smith of Canada Post, which is participating in Free Shipping Day Canada as a merchant this year, links it to the online shopping boom. A Canada Post online poll completed this week found 59 per cent of the nearly 1,000 respondents said they would take advantage of Free Shipping Day to shop for the holidays, Smith says in an email interview.
The Crown corporation may be having its financial woes, but Smith says Canada Post has delivered over a million parcels in a single day at least 3 times early this holiday season, and “expects to have a few more such milestones” before the holidays end.
Consumer demand driving change
Toronto-based retail adviser Doug Stephens, author of The Retail Revival: Re-Imagining Business for the New Age of Consumerism, says the growth in retailers offering free shipping, and events like Free Shipping Day, is largely due to the rising expectations of consumers. He notes that charging shipping costs is one of the biggest reasons for “shopping cart abandonment” – customers logging out before completing a purchase.
Among the Free Shipping Day Canada participants is Montreal-based womenswear company Groupe Dynamite. The company normally charges $9 for shipping – arriving in 3-5 business days or up to 8 days for remote areas - but offers free shipping for its two brands when purchases go over a certain amount: Garage (for orders over $50 without taxes), and Dynamite (orders over $60 without taxes).
“We usually see a great lift in sales when we run free shipping offers and expect to see some great results over the 2013 holiday season,” Elissa Dancziger, Group Dynamite’s e-commerce marketing manager, says from her Montreal office.
Many retailers not participating in Free Shipping Day offer the service year round because they’ve found it has made a huge difference in gaining customer loyalty. Lisa Petti of Kayokokoswimwear.com, for one, started her online business in Windsor, Ont., in 2009 by charging $10 for Canada Post standard shipping within the country and $15 to the United States. A year later, she switched to free shipping for most North American purchases (delivered in a few days) to compete with what she saw as a growing number of competitors offering it.
“As a consumer too, I was always looking for the places that weren’t charging for shipping – for me, that was always a sticking point,” Petti says in an interview from the Hamilton area, where she now lives.