Monday, October 01, 2007

a la pricing and paying for shipping

happened across this thought from Seth about the $0.05 bag phenomenon at Ikea:

"The current Fast Company reports that when Ikea started charging a nickel for shopping bags, consumption went down by 50% (95% in the UK)."

isnt it amazing? apparently Ikea donates the nickel to some green charity. incredible how forcing the customer to make a choice (even if it's only for $0.05) changes the way they act.

I've been thinking about this with shipping in online retail, kids clothes for me but anything really. people hate to pay for shipping no matter how little it is, doesnt matter if it saves them a two hour drive in traffic, $20 in parking and all the aggravation, $6.95 for shipping sends them over the edge.

would you rather the cost of shipping was included in that oilily dress?

Should UPS and FEDEX create a program to incent online retailers to bundle shipping into the price of the goods? if i were them I'd brand some baseline of service and try to eliminate the choice (especially when cheapest option probably means USPS) and sell it that way.

"Here's one practical application. If you make something with low marginal cost
like a CD, consider offering a second one (same title) for a nickel or a
dollar. Why? Because if a customer buys a second as a gift, they've just
helped you spread the word..."

maybe waiting for the dinosaurs to do it is silly, i guess its on the childrens clothing boutique



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