I'll give you a moment to recover from the headline. Hearing about falling prices is generally not something we expect these days, but Target (News - Alert)—reportedly seeking to bolster its online business in the face of strong ongoing competition from places like Amazon and Walmart—has actually lowered the minimum order size required to get free shipping from online purchases. Now, instead of needing to spend a minimum of $50 to get free shipping, Target customers need only spend half that, $25.
The new minimum order, according to reports from Target, will come into play immediately, so those who want to hit Target and do some shopping can start getting the free shipping option for a whole lot less than was ever needed before. Target also offers the Cartwheel mobile app, an app specifically geared toward the use of coupons, so there's a good chance to save money on several fronts.
But shipping costs have become a great way for companies to wage price wars without having to specifically do much to the costs of goods. Companies have routinely been seen offering free shipping in the midst of the holiday shopping season as an inducement to shop, but lately, companies have been bringing out the free shipping as a special inducement when there's no holiday in sight. Given that a lot of retailers are making the stretch into online these days, it makes it downright necessary to bring out something to help drive a little extra business.
Online orders are an increasing part of business for many of those stores; for both Target and Walmart alike, the year ending January 31 saw online orders account for fully 2.5 percent of total revenue. For Target, that means about $1.83 billion, which sounds like a big number until it's found to be a mere fraction of Walmart's $12.2 billion. But Target isn't scoffing at its figures, and likely hopes to raise same with a combination of less expensive shipping and two new distribution centers in the United States specifically geared toward filling online orders.
With mobile commerce becoming a rapidly increasing part of the picture for businesses, it's not out of line to see companies interested in finding ways to lure more customers into shopping. While offering a wider selection of goods tends to help, offering inexpensive shipping is likewise helpful. This may not be the magic bullet solution, but it certainly couldn't hurt; with brick-and-mortar stores offering not only online shopping but also ship-to-store options—in many cases these are free outright and also sometimes even faster, thanks to the interconnected network of shipping that comprises a normal store's operations—that help bolster the operations, giving shoppers one more inexpensive option to get the things said shoppers desire gives said shoppers one more reason to turn to those stores offering the option. Those who want items faster can use ship-to-store and pick up same, while those willing to wait can get reduced shipping costs; this is a development that gives brick-and-mortar something of an edge on pure online shopping, something that's sorely needed as more customers turn to the Web for shopping.
Naturally, only time will tell how well this works out, but with so much so clearly at stake here, trying just about anything at this stage of the game won't be out of line. Companies have to be more appealing to customers, and less expensive shipping is a great path to get there.
Edited by Maurice Nagle
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