News Feature | February 26, 2015

Target Lowers Minimum Purchase Amount For Free Shipping To Undercut Competitors

Source: Innovative Retail Technologies

By Brianna Ahearn, contributing writer

Target Lowers Minimum For Free Shipping

In the world of retail online, free shipping is one of the more powerful the weapons of competition among the world's biggest retailers, and now it's gotten even more cutthroat. Internet retailer Amazon has long offered free shipping with a minimum order of $35 or more to consumers, but now the website has been undercut by one of its competitors. Mashable and other news outlets reported on February 23 that Target has changed the minimum order amount for for free shipping from Target.com to $25 or more, cutting the amount in half from their previous $50 purchase requirement. Besides letting their customers save on shipping, the move from Target shows that they're raising the stakes in the competitive world of online retailing. Target states there's “virtually no exclusions” for the offer either.

One of Target's biggest competitors, Amazon, offered free shipping with orders of $25 or more for years, but in October 2013, they raised the requirement to purchases of $35 or more. The change came after a decade of offering free shipping at the previous $25 minimum Amazon also offers their Amazon Prime program, which for $99.00 annually, customers can enjoy free 2-day shipping on over 20 million items from the retailer and its merchants. When increasing the minimum order amount to $35, Amazon did note that they had added triple the items to be eligible for the free shipping. Walmart is another significant competitor to Target, and currently offers free shipping for orders $50 or more.

Last October, Target offered free shipping on all orders for a limited time for the holidays. The promotion lasted through December 20, 2014 and featured no minimum price for orders, meaning shoppers could spend as little as $10 and receive free shipping. The promotion was one of the earliest holiday offers among the big-box retailer and was well-received by consumers.

“We saw an enthusiastic response to our free shipping offer over the holidays. Now, whether guests are stocking up or doing fill-in shopping, we’ve enhanced our year-round shipping offer to be one of the best in all of retail,” says Jason Goldberger, president of Target.com and Mobile. “Lowering the free shipping threshold from $50 to $25 is one more way Target is putting guests first and making it easier for them to shop Target when and where they want.”

In a press release regarding the change in shipping policy, Target also pointed out that they offer free in-store pickup, and that 80% of their orders are ready in an hour. The retailer recently followed a trend established by Macy's and other retailers, leveraging certain stores as fulfillment centers for Target.com orders. Target says they're still in the midst of testing the process, but they're achieving short shipping times, and plan to open two Target.com fulfillment centers in Memphis, Tennessee and York, Pennsylvania later this year. In 2011, Target introduced free shipping on orders purchased with the Target REDcard. That feature is still available to date. For details on the new free shipping change, consumers can visit the Target shipping hub at Target.com.