Amazon offers free shipping to all customers for the holidays — why that’s more appealing than dollar discounts

Amazon offers free shipping to all customers for the holidays — why that’s more appealing than dollar discounts

Amazon is shipping stuff for free — for all customers.


Amazon said Monday that it will start offering free shipping with no minimum $25 purchase to all U.S. customers throughout the holiday season. Previously, only subscribers to Amazon Prime, which pay $119 per year, were eligible for free shipping.


The announcement comes days after Target TGT, +1.11%  began its free holiday shipping program and marks the start of the holiday season free shipping offers by retailers. (Amazon did not immediately respond to request for comment.)


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Consumer Intelligence Research Partners released a report last year that found the estimated 100 million-plus U.S.-based Amazon Prime AMZN, -2.27%  users spend $1,300 per year on purchases on the site, more than double the $700 for non-Prime members. That may be because Prime members can afford to pay $119 per year for membership, but also like to shop when they know they don’t have to pay for shipping.



Free shipping is a big incentive for click-happy consumers. Nine out of 10 people said free shipping was the No. 1 reason for shopping online more often.


Free shipping is a big incentive for click-happy consumers. Nine out of 10 people said free shipping was the No. 1 reason for shopping online more often, according to the Walker Sands Future of Retail Report. And roughly half said they felt same-day shipping was a reason for shopping more online.


What’s more, another study by marketing company Retention Science concluded that people actually choose free shipping over a dollar discount. They may see it as a more lucrative perk and it makes their online shopping experience more seamless, just like “one-click” shopping.


Also see: What Amazon’s HQ2 will mean for house prices


Of course, it works both ways. People who only intend on spending a few dollars may have been tempted to buy more things to bring their final tally to $25 in order to qualify for free shipping. With no minimum requirement, those shoppers won’t have to pay extra to ship purchases below $25.


Tom Caporaso, CEO of Clarus Commerce, a company that works with companies on premium loyalty programs, summed up the power of free shipping as something that “combines the power of satisfying a universal want (something for nothing) with the power of satisfying a universal demand (free deliveries).”


In other words, free shipping has an appeal that dollar discounts don’t have: Amazon’s latest bid for more customers contains the word “free.”


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