Free Shipping Day could become another Black Friday

Dec. 17, 2012 at 1:21 PM ET /
Coldwater Creek is offering 40 percent off orders in addition to free shipping.

In just four years, Free Shipping Day has grown from a one-off Black Friday spin-off to what one expert predicted could be a billion-dollar day for online sales.

Nearly 1,700 merchants are offering free shipping by Christmas Eve through and on their own sites. As the pool of competing sites expands, merchants are upping the ante with additional incentives this year. This is a boon for procrastinating holiday shoppers, although claiming the deals in some cases involves adhering to fine-print terms and conditions.

"It’s ended up becoming one of the heaviest days for the season," said Andrew Lipsman, vice president of industry analysis at comScore, Inc. 

"I do expect it will be a billion dollar day... It could be well north of that."

Founder Luke Knowles estimated that about 10 percent of participating merchants are offering either expedited shipping or a discount on purchases.

“Every year we’ve done Free Shipping Day the offers have gotten better,” he said. “Last year was the first year we saw retailers offer additional discounts,” and it’s taken off this year.

Clothing brand Coldwater Creek is offering 40 percent off orders in addition to free shipping. A handful of other apparel retailers including Eddie Bauer, Levi’s and J Crew are knocking off 30 percent, as is the Sports Authority, whose free shipping also includes heavy exercise equipment.

Another tactic retailers are using is offering free one- or two-day shipping on orders. Sites including Blue Nile and Fossil are giving shoppers free overnight shipping; Ugg Australia and Boston Proper are offering two-day shipping on all orders.

Of course, “free shipping,” isn’t free for the merchants, especially when it comes to pricey overnight delivery. “You’re sacrificing margin,” Lipsman said, but at the same time, customers spend up to 40 percent more when they’re getting free shipping.

Lipsman said this is why spending thresholds pop up on a lot of Free Shipping Day deals. “That’s a great way for them to be able to offset that margin impact,” he said. Wal-Mart is offering free shipping on all orders of $45 or more, and Macy’s is offering free shipping plus an additional 15 to 20 percent off on orders above $99.

Another way retailers can lessen the hit to their bottom line is by only offering free shipping or discounts on some items. Amazon is offering free overnight shipping on around 150,000 different items. The Limited is pairing its free shipping with a 40 percent discount — but that’s off original prices. And New York & Company is advertising free shipping combined with 50 percent off, with the caveat that many marked-down items and “select new arrival” merchandise are excluded.

The bottom line is that there are some big deals out there today, but reading the fine print is still in order.