Free Shipping Keeps on Giving

Free shipping is a technique that's kept on giving for some online marketers even after the holiday season.

That's what Mondy Beller, the director of marketing at two footwear sites, found out.

Famousfootwear.com trotted out free shipping the Tuesday before Thanksgiving in a promotion that ran through Dec. 5. (After that, the site was locked into running a buy one, get one half-price promotion for the rest of the season.)

During the first week, sales leaped 27% ahead of the previous week — and 70% ahead of December 2001, Beller said. Conversion went up by 28%.

When the site switched to the half-off effort, sales dipped to only 13% over December 2001. “That's still positive, but it's not as significant as free shipping,” Beller said. “Our customers would rather have free shipping than dollars off.”

The success was welcome news to a company that reported a small increase — just 2.5% in its core retail business over the same period. Sales at Famous Footwear's 923 stores for the five-week holiday period ending Jan. 4 inched up to $109.5 million from $106.8 million last year.

Meanwhile, at Shoes.com, the no-cost delivery campaign begun on Nov. 26 sent first-week sales soaring 170% over the previous year. And they remained high — in the 80% to 100% range over 2001 for the rest of the season. Plus, conversion rose by 36%.

Results were so good that Beller's company (the Web sites' parent is St. Louis-based Brown Shoe Co. Inc.) decided to offer free shipping indefinitely.

What was learned from the venture? “I'm convinced customers will go elsewhere if you don't have free shipping,” Beller said.

As good as Beller's results were, the effort also was noteworthy for avoiding a big free-shipping pitfall.

Often free shipping doesn't pay for itself. “You get more sales, but less profit,” said Katie Muldoon, president of DM/catalog consulting firm Muldoon & Baer Inc. in Tequesta, FL.

Beller insists that didn't happen to her sites. “What we lose in margin, we make up in volume,” she said.

Besides, she added, the service will give the Brown Shoe sites an edge over competitors and happy customers should return, which will increase the margin over time.

Beller marketed the efforts by e-mailing a database of about 1 million names she'd gathered on both sites. There were also notices on her sites and ads sprinkled across 2,000 affiliate Web sites.

The offer was good on sales of $35 or more. The average sale on Famousfootwear.com is about $55; on Shoes.com, it's about $75. It costs the company about $4 to $5 per order to ship.

Some 147 retail Web sites offered free-shipping promotions for a limited time, according to BizRate.com, a shopping comparison service, which routinely surveys a pool of 2,000 e-merchants. By February, 158 sites promised free shipping and some planned to continue doing so through 2003.

“Free shipping out-pulls almost any other offer,” said Muldoon.