Toys "R" Us announced this week that it is reducing its free shipping minimum by a whopping $30, from $49 to $19. The change will apply to purchases on the websites for both Toys "R" Us and Babies "R" Us, though surcharges for large and/or heavy items may still apply.
Toys "R" Us VP for eCommerce Matt Blonder attributed the change to "a comprehensive review of the competitive landscape," and the approaching holiday shopping season.
Shipping Minimums Continue Falling, Despite Costs
While prices and inventory remain a huge part of competition among online retailers, free shipping has generated its own arms race in the industry. Amazon, the world's largest online retailer, generally sets the standard with its $35 threshold for free shipping, and $99 price tag for Prime membership, which includes free two-day shipping on all orders.
But recently, stores have tried to undercut Amazon. Target fired a shot across the bow by dropping its shipping minimum to $25, while Walmart introduced unlimited free shipping for $50 a year. Meanwhile, Amazon countered its rivals by expanding free shipping to third-party merchants.
With free shipping now expected by most online shoppers, retailers (like Amazon) are often offering the costly perk at a loss to their own profits. As an alternative, Amazon has tried offering credits on video rentals and books for Prime members who forgo their free two-day shipping in exchange for slower options, and other retailers are likely to follow suit.
Similarly, despite the examples mentioned above, recent studies have actually shown free shipping minimums rising among most major retailers. But with the holiday season approaching and the online marketplace more competitive than ever, retailers may have to reverse that trend, even temporarily.
Readers, are you more likely to make a purchase with Toys "R" Us now that the store has lowered its free shipping minimum to $19?