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The Honolulu Advertiser
Posted on: Friday, November 11, 2005

Free shipping is latest incentive

By David Sharp
Associated Press

Justin Varberakis restocks inventory at the L.L. Bean warehouse in Freeport, Maine. The store is offering free shipping for the first time in three years as retailers anticipate a holiday season in which gasoline and other energy costs could curb consumer spending.

PAT WELLENBACH | Associated Press

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FREEPORT, Maine — Hoping to drum up more sales of 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 lots of company as other retailers use promotions, including free shipping, to get holiday shoppers to open their wallets in 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.

Other promotions such as sales, free gifts and "buy one, get one free" are additional ways to get consumers to shop before their wallets are emptied by high gas prices and, for most of the nation, the first big heating bills of the season.

Walmart.com won't offer free shipping, but expects to increase online sales by 40 percent to 70 percent this holiday season with exclusive online merchandise such as cashmere sweaters and digital audio players, according to Raul Vazquez, vice president of marketing.

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.

A week later, Toys R Us Inc. 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.