Value proposition now includes free shipping
Free shipping for holiday purchases at Target.com will end in a few days, and when it does, a new era will begin regarding consumers’ heightened expectations of the online experience and whether they should have to pay shipping costs.
How retailers feel about the matter and their desire to recoup shipping costs will matter little, because an environment has been created where consumers will gravitate to the online retailer who best eliminates such points of resistance as shipping charges.
Consider the situation this holiday season where free shipping offers were widespread and used primarily as an inducement to get consumers to buy. Free shipping was offered early and often, as retailers sought to eliminate potential barriers to online spending because the outlook for consumer spending was challenging. That has proven to be the case, but now consumers don’t expect to incur shipping charges for items purchased online anymore than they expect to pay a supply chain surcharge to cover the costs of shipping products to stores or stocking shelves.
Shipping charges are reflected in the cost of goods sold in physical stores and eventually, that will be the case in the online space, because customers will demand it and retailers who don’t offer it will be disadvantaged. In addition, free shipping alone isn’t enough to get consumers to spend when other economic factors are in play. Even with the extensive free shipping offers that existed in the marketplace this year, sales have been difficult to come by. ComScore reported that e-commerce sales from Nov. 1 through Dec. 12 totaled $19.44 billion, essentially equal to last year.
“With Christmas now fast approaching, look for online retailers to continue to offer enticing last-minute deals, including discounts on expedited shipping, to spur a final wave of spending,” said comScore chairman Gian Fulgoni. “In fact, some retailers are even willing to offer free shipping as late as Dec. 18 this year, with a guarantee that the shipment will arrive by Christmas Eve. It will be interesting to see the impact that this offer has in terms of pulling additional spending from retail stores to the online channel.”
Kohl’s, Forever 21 win bid for 46 former Mervyn’s stores
MENOMONEE FALLS, Wis. Kohl’s and Forever 21 won a joint bid for the leaseholds of 46 former Mervyn’s locations valued at approximately $6.25 million.
Kohl’s will assume 31 of the locations while Forever 21 will assume 15, pending approval by the court overseeing Mervyns bankruptcy proceedings.
“We are pleased with the results of the auction,” said Kevin Mansell, president and ceo for Kohl’s Department Stores. “With over 1,000 stores from coast to coast, these locations provide increased presence in under penetrated markets. We will continue to be opportunistic and prudent in our discussions with the owners of select Mervyns real estate as we continue to position Kohl’s to grow market share.”
In fiscal 2009, the Kohl’s said it continues to expect to open approximately 50 stores, including the majority of the 31 former Mervyns’ locations.
Bazaarvoice appoints new CFO
AUSTIN, Texas Bazaarvoice, which provides social commerce applications that drive sales, announced that Ken Saunders has joined the company as CFO. Saunders has over 25 years of experience as a senior financial executive at companies including Open Solutions, Peregrine Systems, Fair Isaac Corp. and Arthur Andersen. In his new role at Bazaarvoice, Saunders will guide all aspects of the company’s financial operations, as well as lead the team responsible for day-to-day finance, IT and human operations.
“Bazaarvoice is not only the most innovative social commerce company in the industry, it’s the fastest growing, serving hundreds of major brands worldwide and adding more at a very rapid clip,” said Saunders. “As CFO, I look forward to working with Bazaarvoice’s executive team to drive the company’s growth now and into the future, as they continue to transform the way people interact and shop online.”
“Ken has a wealth of world-class financial experience at both private and public companies, and we’re thrilled to welcome him to the executive team as Bazaarvoice continues to cement its market leadership in the social commerce space,” said Brett Hurt, founder and CEO of Bazaarvoice. “As more and more retailers worldwide embrace the customer voice as a key brand and marketing tool, Bazaarvoice is poised for rapid growth – and Ken is the perfect person to lead our company’s financial strategy.”