Fast and Free Shipping: Can Retailers Afford It?

Retailers are scrambling to offer free shipping for online orders. Is it a money-losing proposition? E-tailing has become so competitive that many online sellers today consider it essential to provide free shipping on many, if not all, of their shipments. At the same time, they are speeding up delivery to the point where customers have come to expect a one- to two-day turnaround on orders. How can both of those perks be sustained, in a business where margins are so thin? Is it simply a game of chicken, with rivals racing one another to the edge of the cliff? Our guest on this episode is Tom Barone, vice president of North American operations with eBay Enterprise. He explains why free shipping has become the price of admission to e-commerce – and why it might not be so free after all. And he discusses how traditional retailers are balancing the cost and speed of peak-season shipping, while embracing all possible channels for getting product to the consumer. ''The omnichannel,'' he says, ''is quickly evolving from nice to have to need to have.''