This week, Amazon raised it’s free super saver delivery threshold to £20, doubling it’s previous free delivery threshold. Regular Amazon customers may know that prior to July 2013, you could get free super saver delivery on every purchase. But why is this important?
It matters firstly because Amazon is the UK leader in eCommerce, according to IMRG. And in short, when Amazon makes a change, others tend to follow. For many years, eCommerce retailers across various sectors offered free delivery on any purchase in order to tempt customers into buying more products, more often. Pretty soon though, it became clear that product margins were being eaten up with the cost of fulfilment and logistics, not to mention delivery.
When Amazon slapped a £10 minimum order value on free super saver delivery in a move designed to recover some of the cost of fulfilment, other retailers followed suit. Previously, retailers had used minimum order values as a way to boost average order values, a tool used by the majority of retailers in IMRG’s rankings.
Now though, many eCommerce retailers are following Amazon’s lead in applying a threshold simply designed to recover some of the costs of fulfilment and delivery. In the fiercely competitive online cycling market for example, the two major players; Wiggle and Chain Reaction Cycles have both recently added free delivery thresholds. £10 in Wiggle’s case, and a competitively priced £9 from their counterparts at Chain Reaction.
A brief glance through the delivery policies of the top 50 UK eCommerce retailers reveals that only Currys/PC World, Game, and fashion retailer Littlewoods offer free home delivery on any purchase, with the majority offering free home delivery on orders above £30 or more, up to £100 in some cases.
So is completely free delivery to home gone for good? Not quite yet it seems. At least not entirely. Free delivery on any purchase will continue to be used as a promotional tool in order to drive sales over certain periods. But with Amazon raising the free delivery threshold to £20, It’s likely those few remaining eCommerce operators with completely free delivery propositions will be rethinking their strategy in the coming weeks.