Amazon Prime has 40 million members in the U.S., suggesting that speedy delivery is a priority for most online shoppers. Yet, the majority of big box brands take four to six days to ship items to consumers.big-box-04

But Amazon’s fulfillment strategies are costly. The online retailer spent $6.6 billion on transportation services and collected just $3.1 billion in shipping fees. Even though Big Box brands have chosen not to compete with Amazon in speed, most have a conditional free shipping strategy to match Amazon on shipping costs without draining capital. 79% of brands in L2’s Digital IQ Index: Big Box offer free shipping and 59% require a minimum.

big-box-2014-shipping-cost-strategypng

 

Even that approach has not been without challenges. Best Buy recently increased its free shipping minimum from $25 to $35, suggesting the previous number did not cover costs. There is no easy cost-effective fulfillment solution. Forgoing free shipping or installing sky-high minimums is not an option either, as half of U.S. consumers abandon their carts if they don’t qualify for free shipping.

L2's Daily Insights in Your Inbox.