About the report
When asked during a visit to Australia in mid-2011 what the biggest disruptor to retail was in the US market, e-commerce veteran Bob Myers had no hesitation in responding: “Free shipping”.
Mr Myers knows a thing or two about the subject – he transformed JCPenney. com into a billion dollar plus online business, then did it once more with QVC. com. He is the only person to sit on the board of both the National Retail Federation and Shop.org, the e-commerce arm of the NRF.
More than group buying, comparison shopping, daily deals, mobile devices and other oft-quoted “disruptors”, free shipping represents the greatest challenge for online and multichannel retailers.
This trend is extending to the Australian market, with an increasing number of local online retailers moving to a free shipping model. Businesses like online footwear retailer StyleTread have made 100 per cent free shipping and free returns the core of its value proposition.
The challenge lies in finding the balance between maintaining margin and increasing order values through free shipping – the threshold where the free offer becomes profitable.
The purpose of this white paper is to outline the options, the trends and the considerations for managing free shipping as a competitive advantage.