First USA Offers Free Holiday Shipping
"The idea was to develop a complimentary benefit for users of the card over the holidays," said Ian Williams, vice president of alliances and promotions at First USA. "We did a study and found that a barrier to ordering from catalogs is the shipping and handling charge but that consumers enjoy the convenience of holiday shopping from catalogs because they are busy and want to avoid the lines in stores."
In a random survey of 1,000 people nationwide, First USA found that 47 percent of consumers expect to shop for holiday gifts by catalog this year and 88 percent would do more shopping by catalog if they could obtain free shipping and handling.
The promotion, a first for First USA, started this month and runs for the rest of the year. It is primarily being marketed to existing cardholders through direct mail and billing inserts, Williams said. The company also will promote the program through public relations efforts and limited DRTV ads. The promotion carries the tag line "First USA, the card that ships it for free" and involves catalogers Art Brown, Bose, Bronner's Christmas Favorites, Calyx & Corolla, The Company Store, Damark, Hale Groves, Harold's, Herrington, JCPenney, Making a Home, The Monthly Grind, Nat Sherman, Omaha Steaks, Orvis and Personal Creations.
"We tried to find a good mix that would fit all our customer's holiday needs," Williams said.
Though participating catalogers may not all necessarily see shipping and handling charges as a barrier, some already are starting to see benefits from the promotion.
"I think people who order from catalogs are familiar with shipping and handling charges and accept them," said Sharon Grunkin, public relations manager at Omaha Steaks, which had never tried a free shipping and handling promotion before. "We looked at this as just another opportunity for us to provide a service to our customers."
The Company Store has not yet seen results, noting that it was too early to study responses. The catalog has worked with First USA on credit card processing, and decided it was worth a test.
"We hadn't done a lot of free shipping and handling promotions and we decided it was a good opportunity," said Mark Friedman, vice president of marketing.
Damark reported seeing an increase in catalog requests.
"Early signs are promising," said Dan Fredeen, vice president of catalog marketing. "We saw that we could do a promotion with a major credit card company that could increase inquiries and sales with relatively no cost to Damark."
Bronner's Christmas Favorites was flooded with catalog requests, one day getting 800 requests that were attributed to the promotion.
"Since last week we have hardly had a break," said catalog coordinator Sharon Bierlein.
The company was interested for three reasons: the amount of circulation, the promotion was run by a credit card company and most of its orders are made with credit cards, and because its catalog -- just three years old -- would be included with a group of well-known catalogs. Bronner's Christmas Favorites has tried shipping and handling promotions in the past and has found that they were popular.
First USA has 43 million credit cards issued and $41.6 billion in total loans outstanding.