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December 2, 2003
PRESS RELEASE
- FOR IMMEDIATE RELEASE
Editorial inquiries,
contact:
George Anderson
908-709-1690
geoanderson@retailwire.com
Big Stakes and
Special Deals: Online Merchants Look For Holiday Sales
Advantage
By George Anderson, editor-in-chief,
RetailWire.com
More shoppers than ever
before will be letting their fingers do the shopping
this year as they sit down in front a computer to order
everything from apparel to wine for the holiday season.
Forrester Research is
predicting a jump in US online sales from $8.4 billion
in 2002 to $12.2 billion this year.
Early returns suggest
Forrester and the numerous other industry watchers predicting
solid sales increases for online merchants are on the
money.
According to comScore
Networks, many consumers just said no to searching for
a parking space and dealing with the crowds last weekend
as online sales on Friday (AKA Black Friday in the retail
trade for being the day stores go from being in the
red to the black) were up 38 percent over last year.
Online sales for the day reached $200 million according
to comScore.
Competition for the online
customer is fierce with retailers offering special discounts
on popular gifting categories such as consumer electronics
and toys while adding perks such as free shipping.
The Toys R Us Web site
on Amazon.com is offering free shipping on orders over
$49 and is selling the 35th Anniversary Elmo for $5
with a toy purchase of $75 or more.
Walmart.com has a 97
cents special shipping order with the purchase of any
one of 200 toys selected by the retailer.
Jeff Bezos, founder and
chief executive of Amazon.com is a big believer in free
shipping's ability to attract customers. The online
retailer offers free ground shipping on orders of $25
or more.
"Customers love it. At
the beginning of this year, we made that permanent,"
Bezos said in an interview earlier this year. "It's
a very expensive thing to do. But by working on cost
structure, by not spending money on things like TV advertising,
we can afford to do that, and the money goes into the
hands of the customers. We're going to continue to do
that. I'm an absolute zealot about that."
Barnes & Noble's
online store recently upped the free shipping ante by
offering its shoppers in some eastern states free overnight
delivery on orders of $25 or more.
The free next day delivery
service is available to shoppers in CT, DE, MD, NJ,
RI, VT, and Washington, DC. The service is also available
to some locations in MA, NY, and PA. Selected zip codes
in New York City are eligible for same-day delivery.
Barnes & Noble's
guarantees orders placed by 11 a.m. (EST), Monday through
Thursday will be delivered the next day by 7 p.m. Friday
orders are delivered on Monday and weekend orders are
shipped overnight for delivery on Tuesday.
Not all are convinced
that special shipping deals do much to move the needle
on sales.
Frank Dell, president
of the retail consulting firm Dellmart, told RetailWire.com,
"The mistake online retailers are making is that they're
using shipping as a promotion element. It is not. Consumers
compare prices between retail stores and on the Internet.
They are trained to consider the price plus sales tax.
To figure in product cost, sales tax and shipping charges
makes the decision too complex. This is one reason so
many online sales are discontinued in the purchase process."
Michael Banks, Ph.D.,
co-founder of the MAP Agency, a firm specializing in
developing custom marketing programs for supermarkets,
c-stores, and consumer packaged goods manufacturers
takes another view.
"Shipping can be an expensive
nuisance item when shopping online, and its elimination
is both a cost promotion and a convenience promotion,"
said Banks. "Convenience is a sustainable promotional
element. Free overnight delivery trumps brick-and-mortar
stores with elimination of a shopping trip while providing
better prices and a better in-stock position."
---
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go to www.retailwire.com
(free registration required).
###
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Editorial inquiries,
contact:
George Anderson
908-709-1690
geoanderson@retailwire.com
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