Leverage Free Shipping and Customer Service to Maximize Online Revenues This Holiday Season

Retailers are making last-minute preparations and considering which tactics will help them attract and convert shoppers as the holiday season kicks off. An October survey of more than 1,000 consumers conducted by MarketLive and the e-tailing group revealed critical considerations and customer preferences for the 2009 season. Among other facts and indicators, free shipping and high-quality customer service rank top of mind for consumers.

Understanding the needs of consumers is the first step to capturing sales this season. The good news: The online channel remains strong this year.

Overall, 55 percent of shoppers indicated they plan to do their holiday shopping online this year, up from 49 percent last year. Holiday budgets also remain healthy, with 43 percent of shoppers planning to spend between $300 and $800, and 33 percent between $800 and $2,500. The survey also shows that the web continues to gain share of wallet, with 26 percent of shoppers planning to purchase more gifts online than last year.

The challenge for retailers is determining how to capture holiday sales profitably. Two findings from the survey indicate areas of opportunity:

1. Twenty-eight percent of consumers said they're willing to pay full price for gifts if retailers offer excellent customer service coupled with the availability of the right products.
2. The primary reason consumers shop online is convenience, but 62 percent of respondents also indicated that high shipping costs remain a barrier to purchase.

Let’s tackle free shipping first. We know that free shipping offers do work, but they must be implemented thoughtfully to reduce impacting profitability.

Deploy Smart Shipping Strategies
Profitable free shipping starts by considering which products, customer segments and time frames are most appropriate for free shipping offers. Retailers can implement free shipping promotions that attract shoppers and encourage conversions while maintaining margins. Here’s how: