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Free shipping the norm this holiday season: Shop.org study

Free shipping is the new standard this holiday season, according to the 2007 eHoliday study, conducted by BizRate Research for Shop.org and Shopzilla.

The sixth annual holiday study surveyed 2,695 online buyers and 116 online retailers from September 26-October 8 about holiday shopping and found that 78% of retailers will offer free shipping with minimum purchase requirements this holiday season.

Sixty percent of retailers will also use free shipping upgrades, 53.5% will offer discounted shipping and 41.4% will offer free shipping without conditions in order to drive sales. Consumers are getting used to this offer, with 61.2% of consumers surveyed saying that free shipping promotions without conditions is one of the promotions they would most like to see this holiday season.

“We are continuing to see consumers embrace the online channel for shopping, all year round and especially during the holidays,” said Scott Silverman, executive director of Shop.org. “They may begin with shopping for only books or apparel online, but as they get more comfortable will expand into other categories such as home furnishings. And, retailers are doing a good job at delivering a better experience online. They have done a good job of saying, æyour package will arrive by a certain date,’ and coming through, which I think increases consumer trust.”

In addition to offering free shipping promotions, retailers will use a variety of other marketing techniques to increase sales. Sixty-three percent of retailers will offer online-only sales this year, up from 59% two years ago. In addition, 35% of retailers will also give early shopper discounts, 37% will give repeat buyer discounts and 55.6% will offer refer-a-friend promotions.

The most important factor for the online shoppers surveyed was value. E-commerce sites provide good value for the money, receiving an average 4.52 rating out of 5.0. In addition, 4.37% of the consumers interviewed said that they expect clear product descriptions, 4.31% will consider a merchant’s reputation and 4.28% value guaranteed on-time delivery when looking for where to shop.

The weak economy does not hold back the expectations of online retailers, as 51.4% of these businesses are expecting online revenue to grow by more than 30% over last holiday season. In addition, 75.9% of the retailers surveyed remain optimistic about the holiday season.

Consumers echoed this enthusiasm. While overall consumer holiday shopping budgets will not see much growth compared with 2006, and the NRF predicting only 4% growth, – the lowest in years – the online sector will continue to receive a larger portion of spending. Thirty-five percent of the consumers surveyed said that they plan to do more of their holiday shopping online than a year ago.

Customers’ top reasons for shopping online instead of in stores is the ability to shop at any time of day, 58.5% of respondents said. Forty-four percent do not want to fight crowds in stores and 38.7% said that they prefer the general convenience of shopping on the Internet. Thirty-six percent of the shoppers surveyed said they like the ability to compare prices online and 29.9% said that items are often easier to find online than in stores.

The survey also found that retailers plan to integrate channels more than ever this year to increase sales. This year, 80.6% of online retailers with stores will offer in-store advertising for their Web sites and 75.8% will offer e-mail registration for customers who do not yet subscribe. In addition, 48.4% of retailers will offer the ability for store associates to place an online order for customers and 30.6% will offer in-store Web kiosks.

“Consumers are demanding more cross-channel chopping experiences,” Silverman added. “We are beginning to see more offerings across channels this year. Some stores are starting to offer returns in-store for merchandise bought online, that may not have offered that last year and more are offering shopping online with in-store pickup.”

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