Target recently announced that the company is cutting its free shipping threshold in half, from $50 to $25. Now online shoppers need to spend only $25 to be eligible for free shipping, no strings attached. This new threshold dips below ecommerce competitors Amazon and Wal-Mart, who require $35 and $50 worth of goods in your check-out basket, respectively. In the race to see who would make it easiest for buyers to qualify for free shipping, Target is in the lead, big time.
Jason Goldberger, president of Target.com and Mobile, was impressed by the great response to lowered shipping thresholds over the holidays, and decided to roll out this eligibility full time. “Now, whether guests are stocking up or doing fill-in shipping, we’ve enhanced our year-round shipping to be the best in all of retail,” Goldberger shared with Internet Retailer. This new shipping threshold is the second modification Target has made to its shipping policies in the past eight months. Previously, free shipping was only available to consumers who racked up $50 or more in purchases, and only for certain products.
Additionally, Target rolled out “Curbside App,” a new program that enables shoppers to place orders online, pay, and then pickup orders from a nearby store – without ever leaving their car. Shoppers need only park in designated locations within the parking lot, and a Target employee hand delivers their products to them. New apps and lowered shipping thresholds are likely contributing to Target’s growing online sales. In Q3 of 2014, the company saw their online sales grow by 30% over the previous year. Market analysts estimate that the difference between Q3 of 2013 versus Q3 of 2014 amounts to roughly $160 million in additional sales.
Target may be enjoying its time in the sun, but what does this mean for the previous “lowest free shipping threshold” title holder, Amazon? News of Target’s changing policies and convenience apps could be part of what prompted Amazon to enter the running to buy old RadioShack real estate. The dying electronics store owned plenty of prime real estate nationwide, and if Amazon had access to the brick and mortar locations, it could begin a pilot program of same-day delivery or in-store pickup for all orders, something it is currently working on with Amazon Campus. Retail locations in every city would enable Amazon to lower its free shipping minimum, and get the heavy-weight ecommerce contender back in the lead.
Is Amazon losing ground in the battle of the best? Let us know your thoughts in the comments.