Retailers hoping promotion delivers

Stores cut shipping costs to lift holiday sales

? Hoping to drum up more sales of handsewn slippers, flannel shirts, sweaters and Christmas wreaths, L.L. Bean has dusted off a promotion it hasn’t offered in three years: free shipping for holiday purchases.

And it will have plenty of company as other retailers use generous promotions including free shipping to get holiday shoppers to open their wallets amid a challenging economic environment.

A holiday survey by Shop.org and BizRate Research suggests 79 percent of online retailers will offer free shipping with conditions such as a minimum order. The promotion resonates with consumers.

“It’ll make or break a sale,” Jason Carley of Morrisville, N.C., said while shopping with his mother down the street from L.L. Bean’s flagship store.

Carley shops for his clothes in stores but he does the rest of his shopping – for DVDs, music and electronics – online.

“I won’t pay full price for shipping,” he said. “If I’m not getting it free, I want to be getting it cheap.”

Shipping incentives will come at a higher cost to retailers as FedEx Corp. and United Parcel Service Inc. have added fuel surcharges, but retailers are pressing forward with them either to drive sales or out of fear of losing customers to competitors.

Hanna Horigan, of Portland, moves merchandise in the warehouse at L.L. Bean in Freeport, Maine. The store is offering free shipping - as shown on a sign above - for the first time in three years as it joins other retailers in getting an early jump on a holiday season in which high energy prices could influence consumer spending.

Jupiter Research reports that 56 percent of online shoppers say free shipping will be more important to them than last year.

“That hits my radar screen loud and clear,” said Lee Warner of Kennebunk, Maine. She usually does half of her shopping online but found herself in Freeport on a recent day on an emergency mission to get a coat for her daughter.

L.L. Bean, which relies on online and catalog sales for 80 percent of its business, began its free shipping promotion early – on Oct. 21 – with no minimum purchase.

The company knew it needed to do something after sales began softening over the summer – even before Hurricanes Katrina, Rita and Wilma, spokesman Rich Donaldson said.

“As it turns out, our decision to go with free shipping was a good one,” Donaldson said. “From our point of view, one of the benefits of free shipping is that it does have a tangible benefit in terms of pocketbook savings.”

A week later, Toys R Us Inc. – which unlike L.L. Bean is mainly a store-based retailer – came out with an offer of free shipping on purchases $49.99 or more. The company made the deal sweeter than last year with additional sales and buy-one-get-one-free promotions.

“‘Tis the season. We’re in the toy business 365 days a year, but the holiday is really the time when we are able to put joy on a lot of children’s faces,” said Kathleen Waugh, director of public relations for the New Jersey-based toy company.