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Monday, March 18, 2024
March 18, 2024

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Target begins offering free shipping for holidays

The Columbian
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MINNEAPOLIS — Two months into the job, Target’s new chief executive has already given the go-ahead to one of the retailer’s key holiday strategies: free shipping.

Starting Wednesday, Target will offer free shipping on any online purchase — no matter the size — through Dec. 20. In doing so, Target is taking an aggressive stance early on in the holiday season. Typically, retailers require a minimum purchase amount before shipping becomes free.

“We’ve spent time as a team to see how we can differentiate ourselves,” Brian Cornell, who began as CEO in August, said in an interview Tuesday. “Leading with free shipping for the holidays we think is a really important step for Target.”

While most of Target’s holiday plans were already solidified before Cornell came on board, free shipping is an initiative decided in just the past few weeks.

In a briefing at its recently opened New York office, Target executives announced more exclusive products for the holidays, a partnership with designer David Stark to transform the stores into a winter shopping wonderland and a new Wish List app for parents and children to share their holiday lists with one another.

But the boldest move was free shipping. One of the most common reasons online shoppers abandon a purchase is when they realize they have to pay shipping. In order to combat that, Target earlier this year simplified its policy to offer free shipping on most orders over $50. It’s taking that one step further for the holidays.

“Clearly, Target will be spending a lot of money on shipping, but to some extent it’s advertising,” said Amy Koo, an analyst with Kantar Retail. “They’re really reaching out and trying to at least play evenly with Amazon this holiday period, particularly as they’re trying to regain those less affluent or more occasional guests” following last year’s data breach.

• GETTING A JUMP ON THE SEASON

According to Kantar’s research, about a quarter of Target shoppers belonged last year to Amazon Prime, the online giant’s fee-based membership program that offers free two-day shipping on many items. But the percentage is probably even higher than that this year, Koo noted.

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Wal-Mart and Best Buy have not yet announced any shipping offers this holiday season. Currently, Wal-Mart offers free shipping on orders of $50 or more and Best Buy offers free shipping on orders of $35 or more. In the past, both have offered free shipping with no minimum purchase during the holidays, sometimes on select items, but neither did so last year. A few retailers, most prominently Nordstrom and Zappos, always offer free shipping on all orders.

Online orders make up only about 2 percent of Target’s overall sales. But the retailer saw 30 percent growth in them last quarter and has been looking to aggressively increase that number. It has improved its website and overhauled its mobile and iPad apps.

“We want to really be there for the guest, no matter how they want to shop Target,” Cornell said.

He also noted that Target has been rolling out ship-from-store capabilities to 38 markets this fall, reaching about 90 percent of U.S. households. This way the retailer doesn’t have to depend on fulfillment centers, but can get items to customers more quickly by sending the items directly from nearby stores.

Cornell is hoping for a big holiday season to pull Target out of a sales slump; the company’s same-store sales have been flat or lower in four of the past six quarters.

Since Cornell has come on board, he’s been upfront about the need to reclaim the retailer’s cheap-chic reputation by focusing on its signature categories such as apparel, home, baby and beauty. And he’s homed in on accelerating the retailer’s digital and mobile growth.

• DEALS AND PRICE MATCHING

Among its other new tactics, Target will try to steer more customers to Cartwheel, its mobile coupon app, with a 50-percent-off deal on a different toy every day from Nov. 2 to Dec. 24.

For the third year in a row, it is extending the time frame of its price-matching policy, which is usually seven days from purchase, to anytime between Nov. 1 and Dec. 24, excluding Black Friday and Cyber Monday.

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