As Blood Sweat and Tears sang in their 1960s hit “Spinning Wheel,” what goes up, must come down.
In the ongoing battle over share of ecommerce wallets, Amazon and Target are moving in different directions with their free shipping policies.
Amazon this week lowered its threshold for free shipping for non-Prime members from $35 to $25, while Target did the reverse, raising its threshold from $25 to $35. Amazon had just lowered its threshold from $49 to $35 in February, weeks after Walmart ditched its ShippingPass program and dropped its threshold from $50 to $35.
Obviously there’s a very involved calculus in determining where to set “free” ecommerce shipping thresholds, including the demographics of your customer base, the type and price of products sold, fulfillment and shipping costs, etc. But at the same time, it’s fairly apparent that moves like this are sometimes knee-jerk reactions to actions taken by competitors.
The thinking probably goes something like this: If enough price-conscious shoppers will buy from us based on a $10 drop in the threshold, it will more than offset any increased costs from the move. Or failing that,…