'Free Shipping Day' Underscores Amazon's Juggernaut

Today, Friday Dec. 17, is the second annual "Free Shipping Day" -- a single day when online merchants band together and offer free shipping on purchases from their sites.

The event is organized by the team that runs FreeShipping.org, an e-commerce blog and alert service that posts and sends out free shipping offers. This year, more than 1,500 merchants have signed up to participate, including lots of big guns such as Sears, Nordstrom's, and J.C. Penney, as well as a lot of smaller national and global brands including Fossil (FOSL) and Patagonia. It's a neat way to boost sales in the holiday run-up. But Free Shipping Day for me underscores the reality that free shipping is becoming a standard feature of online shopping.

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It's a powerful lure, for sure. Earlier this year, the world's largest retailer Walmart (WMT) announced it would start offering free shipping for a significant portion of the items it offered on Walmart.com. This was viewed as a way to counter Amazon, the e-tail giant, and its wildly successful Amazon (AMZN) Prime program (full disclosure -- I'm an avid Amazon Prime user) that gives subscribers who pay $79 each year free two-day shipping on tons of products.

How popular? Ezra Klein of the Washington Post says analysts have tallied members at more than 4 million people, making this a $320 million cash machine for Amazon -- you can bet that Jeff Bezos has special volume deals with FedEx (FDX) and UPS (UPS)!

Then there is Alice.com, the online grocery shipping company that offers free shipping on all orders and is rapidly picking up steam. I suggested that Amazon might buy Alice.com as a follow-on to its recent acquisition of the parent company of Diapers.com. Sure, lots of people pay for shipping. The majority of shoppers still do. And for the holiday rush, big promos offering free shipping are understandable. E-merchants, like all other retail operations, make most of their money in the last three months of the year.

At it's core, FreeShippingDay is a great way to concentrate intentions into a single day and break down what can be a key barrier to hitting the buy button. But the very fact that this is offered as a holiday inducement would seem to indicate that it's a powerful sales driver and another indication of the power of Amazon and the wide expectation of free shipping it has sown.

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