Free Delivery Creates Holiday Boon for U.S. Consumers at High Cost
Yet as more U.S. shoppers view free shipping as their right, retailers struggle to make a profit online. That struggle will become evident in coming weeks when companies report financial results for the holiday quarter, analysts said.
“For most companies, it is a very expensive proposition to try to offer fast and free,” Steve Osburn, director of supply chain for consulting firm Kurt Salmon, said in an interview. “It’s really eating away at the margin dollars at some of these retailers.”
Shipping remains a key battleground in the escalating war between brick-and-mortar retailers and amazon.com Inc, with both sides spending big on logistics. Offering free shipping has long been standard practice during the holidays, but in 2014, retailers leaned on it heavily all year long.