Please ensure Javascript is enabled for purposes of website accessibility

A Foolish Take: Pressure for Retailers to Provide Free Shipping Increases

By Leo Sun - Updated Apr 23, 2019 at 8:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Three-quarters of Americans expect free deliveries for online orders.

In a sign that customers increasingly want something for nothing, a recent survey by the National Retail Federation (NRF) shows that 75% of American consumers expect free delivery options for online orders -- even those under $50 -- compared to 68% last year.

Demand for free deliveries was high across all age groups.

Chart showing percentage of Americans who expect free shipping by age group

Data source: NRF. Chart by author.

And customers want their free deliveries to arrive quickly, with 39% of consumers expecting two-day shipping to be free. Twenty-nine percent of respondents have backed out of a purchase due to a lack of free two-day shipping.

This shift can likely be attributed to Amazon (AMZN 2.07%), which offers two-day shipping for its Prime members. That option technically isn't free, since Prime members pay to be part of Prime, but it forced rivals like Walmart (WMT 1.85%) and Target (TGT 1.70%) to offer their own free two-day shipping options.

Walmart and Target have an advantage over Amazon in that they have lots of physical stores that they can use as pickup locations for customers who are willing to put some effort into getting their purchases without a shipping fee. NRF reported that only 27% of consumers used curbside pickup options, but 63% were keen on trying them -- which indicates that Walmart and Target might be on the right track.

The escalating battle for free shipping options could weigh on these retailers' margins. But it's great news for consumers, who should gain more free shipping options for their online orders.

Check out the latest Amazon, Walmart, and Target earnings call transcripts.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$132.22 (1.85%) $2.40, Inc. Stock Quote, Inc.
$143.55 (2.07%) $2.91
Target Corporation Stock Quote
Target Corporation
$172.48 (1.70%) $2.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.