REthink Wine Blog

According to a 2007 eHoliday Study commissioned by Shop.org “Most Retailers Will Offer Shipping Promos This Holiday”. Surprised? To me this is further evidence that shipping continues to be the greatest hurdle for online consumers, regardless of product, price, or promotion. And for the first time this decade, a majority of retailers have shifted toward promotions with shipping discounts* as standard practice for eliminating this barrier to purchase. Here are some of the key stats that surfaced as a result of the study (survey sample size of 2,695 online buyers and 116 online retailers):

• 78% of retailers will offer free shipping with minimum purchase requirements.
• 60% of retailers will also use free shipping upgrades.
• 54% of retailers will offer discounted shipping.
• 41% of retailers will offer free shipping without conditions.

[61% of the online buyers surveyed said free shipping without conditions is one of the promotions they would like to see for the holiday season.]

Retailers also reported that they plan to use other marketing techniques to increase sales:
• 63% will offer online-only sales.
• 56% will offer refer-a-friend promotions.
• 37% will give repeat-buyer discounts.
• 35% will give early shopper discounts.

Consumers are becoming more comfortable shopping online—35% of those surveyed said they planned to do more of their holiday shopping online this year.

Some of the top reasons that surveyed consumers prefer to shop online instead of in stores:
• 59% for the ability to shop at any time of day.
• 44% don’t want to fight the crowds.
• 39% prefer the convenience of shopping on the Internet.

The survey also stated that to increase sales, retailers plan to integrate channels more than ever this year.
• 81% of online retailers with stores will advertise their Web sites in their stores.
• 76% will offer in-store e-mail registration for customers.
• 48% will offer the ability for store associates to place Web orders for customers.
• 31% will offer in-store Web kiosks.

As I have stated in previous blogs, I believe that the wine industry should take a serious look at subsidizing part or all of shipping costs in an effort to stimulate direct sales. Many wineries choose to discount their prices online which results in conditioning of customer purchase behavior so that over time they do not respond to purchase at full retail pricing. This makes it difficult to offer pre-release promotions on wines because most customers know that it is only a matter of time before the wine price is discounted. Finally, by subsidizing the shipping cost wineries can prevent price erosion which helps to support their other channels of business as well.

* Due to direct shipping laws which frown upon the use of ‘FREE’, remember to be careful when using the word ‘FREE’ in your online promotions - ‘Complimentary Shipping’ is the better alternative.

Sources: Shop.org

This entry was posted by Dan Chapin on Tuesday, November 20th, 2007 at 2:04 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.