December 5, 2019

Bucks: L.L. Bean’s Free-Shipping-Forever Strategy

4:12 p.m. | Updated to add links to the L.L. Bean announcement and the Amazon Prime site. Also updated the Lands’ End reference to reflect its promotions.

L.L. Bean, the venerable outfitter in Freeport, Me., threw in the towel on delivery charges last week and announced that it would offer free shipping from now on. Whether the change portends broader adoption among merchants remains to be seen.

“Our customers told us repeatedly, ‘We would like to not have to pay for shipping,’” Steve Fuller, the company’s chief marketing officer, told me this week. Under the new policy, most purchases will be delivered free in two to five business days with no minimum order. Charges do apply to overnight or one-day delivery.

Like other online retailers, Bean has experimented with free shipping during the holiday season and offered it periodically with orders of a minimum dollar amount. Mr. Fuller said the company was calculating that the free shipping would increase business. That, combined with a shifting of some internal expenses as well as other factors that he declined to elaborate on, will make the change a smart one, he said.

In taking this step, Bean is returning to the free shipping model used in its early days by its founder, Leon Leonwood Bean, as a catalog purveyor of hunting shoes and other outdoorsy items. Mr. Fuller said Bean shipped merchandise free until 1992. The decision to begin charging was much debated, he said, but because he wasn’t at the company at that time, he said he couldn’t comment on Bean’s reasoning.

As to why the company is reinstating free delivery, he noted that people found it easier to back out of sales when ordering online compared with, say, ordering over the phone from a pleasant saleswoman. Shipping charges are visible on the Web site, so shoppers are aware of them before they click the payment button. “One key difference is that on the Internet,” Mr. Fuller said, “shipping is a lot more visible.”

So if L.L. Bean is joining the shoe seller Zappos.com in offering free shipping, why isn’t everyone else? One of Bean’s main competitors, Lands’ End, declined to comment, although it has been offering free shipping promotions this week.

Some sites may be reluctant to drop shipping charges because, oddly enough, they can make money on them. Mr. Fuller declined to name names, but he said an examination of some merchants’ shipping charges suggested a markup. “We never made money on it,” he said, but “I do think some companies make money on it, or recoup their costs.”

Larry Joseloff, vice president of content for Shop.org, the online arm of the National Retail Federation, said he saw more online retailers offering reduced or flat-rate shipping, as a way to set themselves apart from competitors. “It’s a differentiator,” he says. He said customers also had come to expect free shipping, either from periodic promotions or by trolling various Web sites offering coupons for free delivery.

Amazon.com is using a hybrid approach with its Amazon Prime option, in which customers pay an annual fee to qualify for free shipping. But not all online retailers may be able to afford free shipping, Mr. Joseloff notes. Pet stores, for example, might find it difficult to cover the cost of shipping a 40-pound bag of dog food.

That holds true for some oversize items at L.L. Bean, too. Customers shouldn’t expect to have their canoes shipped free, Mr. Fuller said. “There will be some freight charges there.”

How important is free shipping in your online shopping decisions?

Article source: http://feeds.nytimes.com/click.phdo?i=db0247c5eedcefc7b817d23520a3460b