It’s not about the journey… it’s about how much it costs to get to the destination. The early pandemic race that saw delivery speeds approaching Mach levels (at discount prices) is slowing. Now big online retailers are raising shipping costs and shifting what “free shipping” means:
New terms: At the end of February, Amazon bumped the minimum purchase total for its free grocery-delivery service to $150 (up from $35).
More-to-door: FedEx and UPS said they're raising their rates by an average of 7%.
For a price: Nike and Best Buy offer free shipping as a membership-program perk (the cost: shared personal data).
Timing isn’t everything… Determined to keep order totals low, consumers are increasingly opting for longer (that is: cheaper) wait times over costlier fast delivery. The number of packages delivered through Amazon’s shipping option that credits customers up to $1.50 for choosing slower delivery has doubled since 2020, the company said. Meanwhile, a recent survey of online shoppers found that 41% rank shipping cost as their top priority when placing an order (up from 33%), while 22% rank delivery speed as the most important factor (down from 29%). It seems shoppers aren't in a rush: another survey found that 85% of what’s ordered online isn’t opened for days.
Fast isn’t worth the cost of free… With higher retail and grocery costs eating into shoppers’ budgets, many are opting to practice patience when it comes to their online buys. For retailers who’ve used fast, free shipping to gain an edge, stemming losses from higher shipping costs without alienating customers is a careful dance.