Monday, October 08, 2007

more on the shipping childrens clothes thing

more today from the NYT on this topic... some contrasting opinions from various retailers. not sure whether the difference between LL Bean and Overstock is an anonomaly or just bigger differences in the customer base.

according the LL Bean:

Although customers typically order more frequently from the site when they do not have to pay shipping charges, Mr. Fuller said the average order size drops. Because the company holds retail prices steady during the promotion, according to Mr. Fuller, shipping costs diminish the profit margin of each sale.

but switch to Overstock

Overstock has found other, somewhat puzzling, behavior among its customers. The
company has for years offered $2.95 shipping fees on all sales. But according to
Patrick Byrne, Overstock’s chief executive, the site will occasionally drop the
fee to $1, “and suddenly people start ordering $400 bookcases and beds,” he
said. “The average order size goes up unbelievably.

and then to the analyst

According to Patti Freeman Evans, an analyst with Jupiter Research, a technology
consulting firm, “retailers are trying to be smarter about free shipping. It
definitely gets a response, but those customers may have bought anyway, even
without that offer.”
Ms. Evans pointed to a case study last year of Timberland
that found that the online division would have had to generate 40 percent more
sales to justify the cost of an unconditional free shipping promotion.

so what do you think, are you waiting to buy that holiday dress til you get that free shipping offer. I know the mother of oilily fan has her own shipping rate multiplier (meaning she'd drive hours thru rain, sleet and snow just to avoid $6 shipping!)

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