Wal-Mart's size and clout have long enabled it to make waves in retailing, and this holiday season was no exception when the world's largest retailer's decision to offer free shipping had ripple effects.
When Wal-Mart announced earlier in the season that it wouldn't charge to ship nearly 60,000 items from its website, with no minimum purchase, other retailers were forced to follow to compete. Best Buy, the electronics chain, was just one that responded by also offering free shipping.
And shoppers responded. Internet tracker comScore Inc. reported Monday that online sales were up 12 percent over 2009's holiday season.
Overall, increased promotions and last-minute shoppers hitting the stores in the final days before Christmas look to put retailers on track for the best season for holiday sales since at least 2006.
Chain-store sales for the week ended Dec. 18 rose 4.2 percent from the year-earlier period, the best performance in at least 10 weeks, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales gained 1.7 percent, also the best since at least mid-October.
Meanwhile, sales results for Dec. 18 -- Super Saturday, in retail-industry parlance -- saw a 15 percent increase in sales with foot traffic running 10 percent higher, according to ShopperTrak.
That compared against a 16.5 percent drop in sales last year. This past Saturday is on track to be the No. 3 sales day of the holiday season, after Black Friday, the day after Thanksgiving, and Dec. 23, ShopperTrak said.
Free shipping has been deployed by retailers for several years around the holidays to lure shoppers. The perk became especially popular as part of Cyber Monday deals, but it has spread throughout the season, analysts said. This year, the deals are even better -- and even more crucial to retailers' holiday strategies. In fact, shipping has become a game-changer in this most important time of year for retailers.
"Retailers should be aware of the importance of free shipping, because it could make or break their holiday season," Andrew Lipsman, an analyst with comScore, wrote in a recent report. "Consumers have come to expect it and, in many cases, require it to purchase online."
The trend also has implications for consumers -- Wal-Mart contends that its shoppers will save $25 million in shipping fees this holiday season. And as online and holiday sales climb, both the U.S. Postal Service and FedEx Corp. are reporting record volumes of shipments.
Shipping costs are one of the biggest hurdles to getting consumers to shop online, and retailers are offering more aggressive shipping promotions and advertising them more than ever.
Even Amazon.com, a pioneer in online retailing, announced Friday that it would make its free shipping offer available longer -- and allowed customers to order until Sunday, ensuring delivery by Christmas Eve. The cutoff for free shipping last year was Dec. 17.
J.C. Penney began offering free ship-to-store and free home shipping on orders of more than $69 in October. Target is offering free shipping on purchases of $50 or more on 800,000 items for the holiday season. L.L. Bean began offering free shipping with no minimum this summer through Monday.
About 55 percent of online transactions conducted by Nov. 28 included free shipping, compared to 45 percent of transactions at the same time last year, according to comScore. More than half of online purchases still came with free shipping earlier this month.
"Any retailers worried about shipping should remember that consumers will be more willing to open their wallets when they can take advantage of this important incentive," comScore's Lipsman wrote.
Avid Internet shopper Paula Henry frequently gets packages delivered to the law firm where she works as an executive assistant. Henry estimates she did about half her Christmas shopping online -- and said that free shipping offers made the deals more enticing.
"That played a big role," said Henry, who shopped online at Nordstrom, Overstock.com and MAC Cosmetics, among other places. "I don't like to spend extra money for shipping, so that was a big deal."
