More than 50% of Holiday Online Purchases Have Free Shipping

December 8, 2010

The prevalence of free shipping for this year’s holiday shopping season has reached the point it is being offered for than more than 50% of online purchases, according to new comScore data.

Free Shipping Grows Dramatically in Past Month

An analysis of the share of e-commerce transactions that included free shipping suggests that the promotion has accelerated in importance in 2010, with each of the most recent three weeks seeing more than 50% of all transactions include this incentive.

The week ending Sunday, November 28, 2010 showed a peak free shipping rate of 55.1%. This was 23% higher than the 44.8% free shipping rate recorded during the week ending November 7, 2010, which marked the first week of the 2010 holiday shopping season as tracked by comScore.

In addition, the 55.1% rate was 21% higher than the rate of 45.6% recorded during the corresponding week in 2009. The most recent week (ending December 5, 2010) also showed a significant increase from the same week last year, growing 17% from 43.8% to 51.4%.

“Without a doubt, free shipping has become a critical driver of e-commerce purchasing, with the majority of consumers indicating that they will abandon their shopping carts if they get to check-out and find that free shipping is not included,” said comScore Chairman Gian Fulgoni. “Retailers have increasingly responded to this consumer demand, with market leaders Amazon and Walmart, for example, both offering free shipping on virtually all transactions this season.”

Fulgoni also said transactions with free shipping run an average of 30% higher in basket value than those without.

Holiday E-commerce Spending Up 12% So Far

For the first 35 days of the November – December 2010 holiday season (Nov. 1- Dec. 5), comScore has recorded more than $17.5 billion has been spent online, marking a 12% increase compared to the corresponding days last year.

The most recent week saw four individual days eclipse $800 million in spending, led by Cyber Monday (Nov. 29), which became the heaviest online spending day on record at $1.028 billion, up 16% year-over-year from $887 million.

Tuesday, November 30 reached $911 million, making it the third-heaviest online spending day on record, with Wednesday ($868 million) and Thursday ($850 million) also reaching high levels, although growth rates for the season subsided in the latter half of the week and through the weekend.

Thanksgiving, Black Friday See Healthy Increases

Online spending on Thanskgiving Day (Nov. 25) and Black Friday (Nov. 26) did not reach Cyber Monday levels, but still increased notably from the same days in 2009. Thanksgiving e-commerce spending totaled $407 million, up 28% year-over-year from $318 million. And e-commerce spending on Black Friday reached $648 million, a 9% increase from $595 million in 2009.

Large Online Retailers Gain Market Share from Mid- and Long-Tail

One other trend that comScore has tracked since the beginning of the recession is the shift of online spending dollars toward larger retailers, who typically have greater financial resources to invest in offering the most competitive pricing on goods and services. In fact, growth for the holiday season to date has come almost entirely from the Top 25 online retailers, who have seen their total dollar sales grow 20%, while overall growth among the small- and mid-sized retailers has been flat.

The top 25 retailers have gained more than 6% of market share to a level of almost 68%, compared to a level of about 64% during the 2009 holiday season.


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