In a press release, Cornell stated that Target will provide free standard ground shipping on all orders placed through target.com through December 20, with no minimum purchase amount required. With sales through digital channels being up 40% this year, this move should help customers regain confidence in the giant retailer but also boost the company’s financial reports.
However, according to a new report in the Wall Street journal, approximately 66% of orders through target.com ship free because items are purchased using the company’s REDcard or they meet the usual $50 minimum.
Amy Koo, analyst with Kantar Retail, told reporters that Target will actually spend a significant amount of money this year on shipping and on a smaller scale, its advertising. She added that Target is making an effort to reach out and get on an even playing field with its competitor Amazon for the 2014 holiday season, especially while trying to regain occasional and less affluent shoppers following the breach.
In a recent study, experts determined that more than 50% of American consumers will make at least one online purchase for the upcoming holidays. The study, conducted by Prosper Insights & Analytics for shop.org also stated that on average, online shoppers will spend 16% more this holiday season compared to all other shoppers.
Cornell points out that free holiday season shopping is one aspect of Target’s plan to differentiate itself now but also for the future. The company has been building capabilities that put Target in a strong starting position, which includes a wide range of on-trend and unique merchandise, as well as the right digital tools.
He believes Target’s value proposition cannot be challenged, thanks to incredible in-store and online shopping experiences, as well as alluring promotions. Target’s promise to customers is to “Expect More and Pay Less”, something that Cornell plans to deliver.