Amazon extends 'free shipping day' as Christmas approaches

Dive Brief:

• Amazon did "free shipping day" one better by extending its free shipping deadline to Saturday, according to a company press release. Through the deals site FreeShippingDay.com, more than 1,000 retailers offered free shipping on online orders with guaranteed delivery by Christmas Eve, with no minimum purchase required.

• Participating merchants had to offer free shipping on all orders — with no minimum purchase — on Dec. 15, with promised delivery by Christmas Eve.

• Retailers that promised free shipping on Friday, with packages arriving in time for Christmas, included Target, Macy's, Bloomingdale's, Gap, Best Buy, Harry & David, J.C. Penney, Toys R Us, Popcorn Factory and Vera Bradley, among many others. Nordstrom, which offers free shipping both ways, is also offering $10 Saturday delivery on qualifying merchandise ordered by Dec. 22 by noon ET.

Dive Insight:

Freeshippingday.com celebrated its 10th year on Friday as the demand for last-minute gifts grows. Holiday shopping has been accomplished more online this year than ever, and a lot of that started early. Despite a high level of confidence against the backdrop of a healthy economy, consumers remain budget-minded, though, and expectations for free shipping have been high.

Most online shoppers will have taken advantage of free shipping (94%) and conveniences like buy online, pick up in store (49%); 19% will take advantage of expedited shipping and 12% will use same-day delivery, the National Retail Federation found in research earlier this year. Online sales this holiday could rise 13.8% to $107.4 billion, while in-store retail sales will grow 10%, according to Adobe's holiday retail report, based on number crunching from its Adobe Analytics unit, which found that free shipping would be a major driver of that.

Retailers winning over holiday shoppers will be those "offering steep discounts and providing a seamless customer journey," according to Mickey Mericle, Adobe vice president of marketing and insights. "This year's record-breaking online holiday shopping season is built on the strength of the big players," she said. "We predict the biggest retailers with wide selections, easy shopping experiences and free shipping, to drive online holiday growth this year. Still, there is opportunity for savvy small retailers to win, specifically with mobile experiences."

Delivery promises have been tempered this year and shippers got their ducks in a row, after previously experiencing humiliating holiday delays that angered customers and pitted retailers and shippers against each other. Macy's and Best Buy expanded same-day delivery ahead of the season, UPS upped delivery prices for retailers earlier this spring and Pitney Bowes acquired Newgistics as more online holiday shoppers were demanding free and trackable shipping. Also, app-based delivery provider Postmates cut delivery fees for orders that exceed $20, meaning Postmates Unlimited subscribers didn't have to pay more than their $9.99 per month subscription fee. 

As the expected surge in online shopping materialized this year, UPS, for one, nevertheless became overwhelmed by deliveries and warned of some delays earlier this month, despite those strategically planned peak season rate rises. The shipper has pressed drivers into additional service, including raising the number of hours drivers work to 70 hours over an eight-day period, up from 60 over seven days.

This story is part of our ongoing coverage of the 2017 holiday shopping season. You can browse our holiday page and sign up for our holiday newsletter for more stories.