Target Takes on Amazon with Free Shipping This Holiday Season: What Your Business Should Know

Each holiday season, retailers seem to struggle with the need to compete with online giant Amazon, and its services such as free shipping with Prime. Online shopping is an attractive option, especially for those customers who have limited time and a long buying list. In previous years, many customers continued to buy locally because they wanted to be sure they’d have items on time. But even that benefit has diminished in recent years, since customers can order from Amazon and receive many items within a couple of days.

Instead of trying to battle the online giant by simply being local, one major retailer has decided to go after its ecommerce business. After taking a big financial hit earlier this year, popular department store Target has decided to help customers by offering free shipping and wish lists this holiday season.

What does this mean for your small business? Here are three things you should know as you prepare to compete this holiday shopping season.

Reconsider Free Shipping – Shipping Costs Scare Customers

If you’re reluctant to offer free shipping this holiday season, this statistic might change your mind. According to Statistica, 56 percent of all shopping cart abandonment is the result of an unexpected price at checkout. In fact, customers find free shipping more compelling than “percent-off” offers. Not only will your free shipping promotion lure customers to your site this season, but it will likely result in higher sales. If you’re concerned about costs, implement a reasonable purchase requirement before free shipping kicks in.

Local is Still Relevant

Despite the popularity of online shopping, your local business isn’t completely out of the running, even if you don’t have an online store. A Gallup poll last year found that while 53 percent of people planned to do some or all of their Christmas shopping online, department stores and discount stores remain the most popular places for Christmas shopping. Customers still like the immediacy afforded by local businesses, as well as the reassurance that the item can be returned if it is the wrong size or the recipient doesn’t want it. For storefronts with websites, the ability to return an item locally is a big selling point for Christmas shoppers, who will like the ability to choose items online and have them delivered to their homes while still being able to provide gift receipts with their packages.

Offer Wish Lists

Both Target and Amazon now offer wish lists, which are similar to wedding and baby registries. Customers add items to the list and email the link to their friends and family, who can also search the wish list database to find it. If your store has a wide variety of items, consider offering a wish list feature to encourage loyal customers to let their families know what they want this year. You can also make sure your store shows up in popular wish list apps to reach customers who create wish lists with items from a variety of retailers.

Businesses are more competitive than ever as they strive to reach customers both online and locally. Even small businesses can learn from Target’s decision to make things as easy as possible for customers and hopefully lure them away from Amazon. With local delivery on the horizon, it will be more important than ever that small businesses find ways to offer both convenience and great customer service.