August 31, 2011

Nordstrom Free Shipping

Some of you forwarded me news that Nordstrom now offers free shipping, no hurdle.

This is usually followed by a few comments.
  1. How can they afford to do this?
  2. Is this a fad, or is everybody going to go this route?
  3. If everybody goes this route, I'm in big trouble, because I need a 40% lift in demand to cover the cost of free shipping, and that will never happen when everybody is doing free shipping.
As you already know, I think this is what will happen to you, the cataloger:
  1. You will be forced into some form of free shipping.
  2. You will not get a big enough bump in response/conversion to pay for free shipping.
  3. You will have to reduce catalog circulation to pay for free shipping.
  4. You will choose to cut catalog customer acquisition.
  5. You should choose to cut housefile circulation.
Lots of folks are inquiring about 2012 projects, projects where circulation cuts will be used to fund other marketing activities (like free shipping).  It might be a good time to schedule your project for Nov/Dec, so that you can act in 2012 ... contact me now for details.