We've been talking about free shipping and now it appears many of the well-known players are going to use it. So what're your current thoughts on free shipping now on the eve of the biggest shopping time of the year?
ha ya I find myself mentioning it a lot too - but i was referring to this particular thread.
To me the whole free shipping issue is such a no-brainer. It increases my conversions and I price my products accordingly. It almost seems silly to be having this conversation, although I guess the low profit high volume guys walk a much finer line then some of us.
The secret here is that you want to offer 'free shipping' to those customers that are hunting for a bargain and get the people who are concerned about quality, service, speed and/or security to pail full price or more for shipping.
The trouble is identifying the bargain hunters, from the value seekers, from the convience shoppers, from the security worriers.
THE GAP has done it VERY well with Old Navy vs Gap vs Bannana Republic -- same crap, same retailer, same mall, different prices.
Discerning this on the web is much more difficult, though very possible. I'd reveal the secret but the you wouldn't buy my new book, come to my session at the conference AND my boss would kick my a*s for revealing too many company secrets. He already hates that I participate in forums at all - he'd rather I just lurked and leached.
But the answer is there - Free Shipping works, but not for all shoppers or products. Find out where and who in your particular niche and you are a happy camper.
in my space (it is a fairly low margin, freight sensitive area), the "free shipping" merchants have simply padded up their margins.
we have elected to keep our product prices lower - this has helped us in the engines where customers can sort by price.
as for lifetime value - i feel that you need to discount this number back to today's dollars - if you have a very strong balance sheet and your cost of capital is low, you will have a diiferent view of ltv than many of us relatively smaller companies.....