Shipping Tips & Solutions

What SMBs Need to Know About Amazon and Target’s Free Shipping Holiday Promotions

By: Michelle McNamara | November 7, 2018

It should come as no surprise that Amazon and Target are upping the ante on their free shipping promotions this holiday season to further attract customers. As we all know, free shipping can make or break a consumer’s shopping experience. Just take a look at almost any retail survey published in the past few years:

  • Nine out of 10 people said free shipping was the No. 1 incentive when asked what would make them shop online more often.
  • 68 percent of online shoppers expect free shipping even on purchases of less than $50, with 47 percent saying they typically back out if shipping isn’t free.
  • 31 percent of consumers will wait to make a purchase until there’s a free shipping offer.

The bigger question is how can small businesses compete? In Shippo’s 2017 State of Shipping survey, 68 percent of business owners consider the cost of shipping to be the biggest operational challenge. And it’s no wonder since so many customers expect business owners to cover the cost of shipping.

Here’s a deeper look at Amazon and Target’s free shipping offerings this holiday season and what they mean for small and medium-sized businesses this year.

Amazon Offers Free Shipping for All  

On Monday, Amazon announced it is offering free shipping to everyone during the holidays. This is a first for Amazon. It has never offered U.S. shoppers free standard shipping without a minimum. It’s worth noting that Amazon is offering free standard shipping, which means packages will arrive in 5 to 8 business days.

Amazon will continue to provide its Prime members with free, two-day shipping, as well.

Target Promotes Free, 2-Day Shipping

Target announced free, two-day shipping to all guests on hundreds of thousands of items, with no minimum purchase and no membership required. This free shipping promotion will last until December 22.

What Does this Mean for Small Businesses?

As a small or medium-sized business, you must take a hard look at your shipping costs this season and look for ways to offer free shipping. Otherwise, you risk losing customers to competitors with free shipping banners all over their homepage.

The 411 on Offering Free Shipping

The good news is that there are many ways to offer free shipping to help recoup some of the costs. You can:

  • Set up a purchase value threshold with customers qualifying for free shipping once their order value passes a certain dollar amount.
  • Offer free shipping when a specific item is added to an order.
  • Include free shipping as a perk for being a loyalty or rewards member.

In addition, you’ll need to make sure your shipping is optimized since every cent matters.

Use Shipping Automations

One way to save money on shipping is to use automations to speed up the process and require less manual labor. Shipping software like Shippo, for example, allows you to print up to 100 shipping labels at once, verify addresses, and automatically send tracking information to customers. Shippo can help you streamline your fulfillment process, so your team can spend less time on shipping and more time doing other holiday-related tasks.

Reward Early Holiday Shoppers

Slower carrier service levels, like USPS First-Class Package Service and UPS Ground, are typically more affordable than their Expedited shipping counterparts. If you’re able to get your package in the mail sooner using one of these slower carrier service levels, you can save big on postage.

Encourage shoppers to click “buy” sooner by launching your best promotions and sales of the season early.

Review Your Shipping Mix

It’s a good time to refresh your shipping mix and take a close look at what’s working and what’s not. If you have one or two popular orders, you can focus on optimizing the packaging and carrier service level for your best sellers to get the most out of the precious time you have. 

When it comes to finding the best shipping rate, you’ll want to take a look at your box size and weight. A good rule of thumb is that small, lightweight packages traveling shorter distances tend to be most affordable.

Look for opportunities to use smaller boxes or even poly mailers. If you do opt for a bag or sack, your product may even qualify for USPS Soft Pack pricing, which is a great option for clothing retailers.

The holiday season is mission critical for so many small and medium-sized businesses. It’s imperative that you take a close look at your shipping mix and look for ways to offer free shipping in order to compete with other big and small online retailers. Above all else, make sure you’re doing what’s right for your business. Consider your own unique value propositions and shipping mix to make sure your holiday promotions fit your needs and sales goals.

For more advice, check out our Holiday Selling and Shipping Central.

Michelle McNamara

Content Strategist at Shippo

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