In the World of Free Shipping, Who Pays?

In the World of Free Shipping, Who Pays?

It has become apparent to the online retailers of the world, Amazon, Jet and the multichannel retailers as Walmart, Target and others, free shipping is the name of the game. Walmart has launched the ShippingPass at $49 annually compared to the prime membership of $99 from Amazon. Those memberships provide free, fast shipping which has become an expectation in the eyes of consumers.

“I want what I want when I want it” a phrase that sums it up according to consumer psychologist Dr. Kit Yarrow.

In the world of instant gratification the consumer does not want to wait for anything and now they don’t need to. All barriers are down, shipping is free and the internet is open 24/7. But who pays for shipping?

We used to search for the best price online and make a decision on what to buy based on total cost, shipping cost were not free everywhere back in the days. Now most products already include free shipping, do we still compare as much? How much are we willing to pay for convenience? How much more than we need to we actually buy just to justify our “free shipping” membership that we pay for upfront?

Somewhere between the consumer, the online retailers and its suppliers the cost of shipping is being added. Are consumers becoming less price-sensitive with higher expectations to get what they want when they want it? Did online retailers make the decision to increase logistics costs in order to gain market share? Or does it all fall on the suppliers and manufacturers?

What do you think?