Good News? Free Shipping, Online Transactions Hit Record Levels

Holiday ecommerce sales have hit record levels with a high dependence on free shipping promotions. Will this help or hurt your online business in the new year?

Over 50% of all online orders include free shipping while four individual days surpass $900 million in sales during the week of December 11-17, 2010. How will this impact your online business in the long-term?

The holiday ecommerce train is picking up steam.

comScore reports that the week of December 11-17 hit a record high of $5.5 billion in ecommerce sales, an increase of 14% compared to the same time last year. Sales passed the $900 million mark on four individual days of this week, led by Green Monday (December 13, $954M) and Free Shipping Day (December 17, $942M).

As a whole, we’ve seen a 12% increase in holiday ecommerce sales, spanning from November 1 to December 17. This figure is expected to rise during the final push before Christmas, as last-minute shoppers scurry to find hot deals and items.

One statistic of note involves free shipping – never before has the ecommerce industry witnessed such a dependence on this promotion. In fact, since November 21, over 50% of online orders have included a free shipping promotion. This past week, 52.7% of all transactions came with free shipping.

Here’s a glimpse at the impact of free shipping:
These free shipping statistics show a dramatic increase in the dependency of this promotion.

But is this surge a good thing?

Naturally, any increase in ecommerce sales is a plus for the industry. But are we hurting ourselves long-term by training customers to expect free shipping? If so, how will this affect your bottom line, especially as shipping costs continue to rise?

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What do you think? Will this surge in free shipping help or hurt your online business? Leave a comment below!

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Happy selling!
-Matt Winn, Online Communications Specialist, Volusion

About 

Matt Winn is Volusion’s Senior Brand Manager, where he helps oversee the organization’s branding and communications efforts. Matt has created hundreds of articles, videos and seminars on all things ecommerce, ranging from online marketing to web design and customer experience. Beyond being a certified nerd, Matt is an avid college football fan, enthusiastic home cook and a self-admitted reality TV junkie.

2 Responses to “Good News? Free Shipping, Online Transactions Hit Record Levels”

  1. Joyce

    Hank, I completely agree with you. I’m just setting up my store and offering low ticket items. There is no way I can wrap the cost of shipping into my products or they would seem very overpriced. And I certainly cannot absorb more than a very small portion of the shipping cost, or I would ruin any margin.

    For small, high ticket items, free shipping makes sense as it may only equate to 5% of the sale, and “free shipping” sounds a lot better than “5% off”. But if you have a low cost item, free shipping equates to more like 50-70% off. Not really rational if you’re trying to stay in business.

    Of course, you can still offer free shipping on orders over a certain dollar amount (e.g. customer orders 20 of you low priced items) – then it is essentially a volume discount.

    Reply
  2. Hank

    Hi:
    Just let every online owner know, don’t offer “Free Shipping”, It’s suicide to your business if you selling low ticket items. Unless your item is unique, high ticket, can’t find anywhere on web, and you include the shipping charge in the price. Otherwise, It will definitely hurt online business, and all online business will be busy for nothing. Seperate the Price and Shipping Charge as USDED To BE.

    I would love to hear some suggestions and feedback for low ticket item under $25.00, How do you offer “Free Shipping”? How do you use the most efficient and least expensive way to ship?

    Reply

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