Running errands can mean running through a lot of gas. That's got a lot of Americans grabbing the computer mouse instead of the car keys. As reported in The New York Times, online sales are a surprising "bright spot" in retail with a number of big players — GAP, Victoria's Secret, JC Penney — experiencing double-digit sales growth on their shopping sites.
It makes perfect sense when you consider online shopping has always been about three things: selection, price and convenience. The selection is bigger than ever, the prices are competitive, and — when you factor in gas — the total cost of ordering something online could be lower and convenience just paid for itself. Bottom line: Consumers don't want to take the risk of spending time & gas driving around running errands if they don't need to.
So, can you really get a "net" savings by hitting the net? We "road tested" a few examples to steer consumers in the right direction. The power move and one of the most effective online promotions online is two words: free or flat-rate shipping. Generally, there are four models:
- Flat-rate shipping
- Free shipping with purchase minimum
- Free or discounted shipping on select items
- Always free
Working with these models and assuming a current average gas price of approximately $4 per gallon, we set out to see whether it's better to drive and pick up some items or whether it actually pays to have them delivered.
You've got to adjust the math based on the distance from wherever you'd need to pick something up and you can get the exact mileage and even the cheapest route on sites like www.MapQuest.com. That number could affect your decision, so adjust accordingly.
www.GAP.com; Flat-rate shipping
One of the best examples right now is this promotion from the GAP. You can shop at all three of their big brands — GAP, Old Navy, & Banana Republic — on one site and and buy as much as you want with flat rate shipping of $7. Consider the math: If you drove to two out of the three stores and they were each 10 miles away (20 miles round-trip) at $4 a gallon assuming 20 miles per gallon, you'll pay roughly $8 to get the exact same items you could have delivered to your doorstep.
Verdict: Get it delivered!
Barnes & Noble
www.bn.com;Free shipping with minimum purchase
Books were one of the first things sold online and it's assumed they're usually pretty affordable on the shipping side. Sometimes it depends on how many you're buying. And you may think more is going to cost you more, because of weight, but it really often has to do with hitting a certain spending threshold. Here's an example — and you see it a lot — of how reaching a certain spending threshold can really change the math.
When we went to buy one book at $13.50, the standard shipping was $3.99 or 30 percent. That might be worth a drive. When we added a second book and crossed the $25 total mark, shipping was free. Now, you're still spending more overall, but you may be getting more for your money than if you get in the car. In fact, that second book just might be a gimmie for giving up gas. So, maybe check your calendar. Think ahead: Is someone's birthday coming up? Might this be the time to grab something to give later?
Verdict: For one book, drive; Two books, get it delivered!
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If you're the kind of person who likes to touch and feel something, before you shell out the cash, you're not alone. In fact, it's estimated 70 percent of people research purchases to some degree online before they make a purchase in store. If you fit the profile, you could take advantage of the ability to "check in-store inventory online." At least you'll know if the store you are heading to has the item "in stock." This can save you from driving to three different Circuit City locations and burning gas only to find out they don't carry what you're after or it's sold out.
So, if you're seeking a specific digital camera, you'd type in your zip code — and they'll tell you the nearest location addresses with the approximate mileage of the closest store with the item in stock. You can buy it online and have them hold it for you for in-store or you can read the reviews, get some additional information and then pick the shortest path.
Verdict: Drive (just don't drive in circles and without a clue if the item will be there when you get there)
www.Zappos.com; Always free outbound and return shipping
Commerce studies indicate one of the things people struggle most to find in both selection and size, are shoes. In fact, about one in three sales are lost at stores due to someone's size not being in stock. With a whopping three million items, to say Zappos.com is well-stocked, would be an understatement! And they have free shipping and free returns 24/7, 365 days a year.
www.homedepot.com; Free shipping on select items
You may be surprised a circular saw may not be worth driving in circles to go get. We've all done it, made multiple trips to Home Depot in a day. If there is something specific you need, you could buy it online this week at work & it'll be there for you free of charges when you start back up with chores next weekend.
www.OfficeDepot.com; Free shipping on orders of $50 or more
Office Depot offers free next day shipping on orders of $50 or more if you are in a "local delivery" area, usually within 20 miles (Office Max & Staples offer same deal). To see whether your address is in a local delivery area, look at your shopping cart total (upper right-hand side of the homepage), if your order is over $50 and you are in a local delivery area, a "free delivery" notice will appear in the shopping cart. If there is an amount listed after "delivery" in your shopping cart, then your address is outside of our local delivery area and you will incur the delivery charges shown.
If you're running a home business or working from home, this may be the way to go because every minute you’re out of the office and on the road, can cost you. "Free delivery" is not offered on items 70 pounds and up or orders totaling more than 70 pounds.
Verdict: Deliver (unless your order weighs 70 pounds or more)!
Will these types of offers continue?
Retailers are pulling out all the stops to court consumers and fine-tuning their marketing models to spark both online and in-store sales. All indications are consumers can likely look forward to continued incentives heading into the all-important back-to-school and holiday shopping seasons.
For more smart financial advice and tips, visit Reginalewis.com.
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