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Future Shop free shipping indefinitely

Old 03-08-03, 10:10 AM
  #1  
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Future Shop free shipping indefinitely

FutureShop.ca ups ante in online shopping battle
Retailer offers free shipping on all purchases `We're feeling confident we can deliver on this'

TYLER HAMILTON
TECHNOLOGY REPORTER

Future Shop broke new ground in Canadian online retailing yesterday by announcing it will offer free shipping, indefinitely, on every product purchased over its Web site.

The policy applies to any order size, meaning a consumer who buys a single DVD at FutureShop.ca will no longer pay additional delivery charges.

"This isn't a promotional ploy," said company spokesperson Lori DeCou, who described delivery fees as an "obstacle" to online shopping.

"We're feeling confident we can deliver on this. This wasn't something we got to through a hasty decision overnight. This is a strategy we've known for a long time, one that customers have wanted."

Experts say free shipping is a trend that few Internet retailers can ignore as competition for online dollars heats up. But most Web retailers tend to offer free shipping on a limited promotional basis, or when a minimum purchase threshold has been surpassed.

Jim Okamura, an e-tail analyst with J.C. Williams Group, said Future Shop's decision could partly be a pre-emptive move against Amazon.ca, which since January has had a permanent free-shipping policy in place on orders over $39.

Amazon.ca and FutureShop.ca compete online for CD and DVD sales, but a source close to Seattle-based Amazon.com Inc. said the company is "obviously considering" expanding U.S. sales of electronics products into the Canadian market.

Future Shop, owned by Minneapolis-based Best Buy Co., is the largest electronics retailer in Canada. The company doesn't disclose what percentage of sales come from its Web site, but DeCou said the online business is a "profitable channel" showing "a significant amount of growth."

According to market research firm comScore, FutureShop.ca was the country's most visited retail Web site in December and January, jumping ahead of Amazon.ca and Sears.ca. This followed a major redesign of FutureShop.ca in mid-November.

Competition has increased.

Radioshack.ca, Staples.ca and CompuSmart.com all sell electronics goods in Canada and, with the exception of the first, all offer free-shipping deals. CompuSmart ships for free on orders over $99, while Staples.ca pegs that threshold at $50.

Amazon.ca has put on the pressure in the market for music and DVDs. The company has reduced its free-shipping purchase threshold three times in the past seven months, forcing rival Chapters.Indigo.ca to reluctantly follow.

Amazon.com spent more than $30 million (U.S.) in its fourth quarter on its free shipping program, and plans to spend another $100 million this year.

Bizrate, a comparison-shopping site, found in a Christmas customer survey that 37 per cent of online shoppers are influenced by free shipping offers.

Okamura said Future Shop's decision to drop the minimum-purchase barrier and to offer free shipping on a permanent basis is a gamble.

"It's risky," he said. "To be out there 365 days a year with free shipping in a category that's historically had very low margins, it's good for the top line but makes it that much more difficult to operate profitably."

Customers, he added, will come to expect free shipping, making it difficult to pull away if the strategy backfires.
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Old 03-08-03, 04:22 PM
  #2  
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That's neat But they didn't "break new ground" in the free shipping dealy. Various smaller online mobs been offering free shipping with no minimum for ages.
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