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.
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 +1.61%), 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 +0.92%) and Target (TGT +0.68%) 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.
