Etsy Joins Free Shipping Stampede

Add Etsy to the growing list of ecommerce companies offering free shipping for U.S. buyers, at least for orders over $35. The Brooklyn, New York-based online marketplace specializing in handcrafted and vintage items says it made the decision based on evolving customer expectations.

The change is scheduled to begin at the end of the month, with Etsy boosting the search results of items that offer free shipping -- and planning to market the change in the fall. It says a limited-time free shipping test back in May led to higher order values, and that customers are significantly more likely to buy items with free shipping.

“This initiative is a step in the right direction for Etsy,” writes Ygal Arounian, an analyst who follows the company for Wedbush Securities, which currently assigns the online marketplace a neutral rating. “And while we agree that free shipping is table stakes today (or close to it), we also believe fast and accurate shipping is just as important to consumers, a more difficult hurdle for Etsy to jump as many products are custom-made, and larger and more fragile items on the site can have higher costs and take longer to deliver.”



The fall free-shipping initiative “should help Etsy’s brand awareness push around the holidays,” he adds.

An additional wrinkle is that many of Etsy’s items are made outside the U.S. Etsy says it plans to provide global sellers with tools and educational resources to help them adopt a free-shipping guarantee.

Free shipping continues to gain in importance for online shoppers, driving the popularity of offerings from Amazon Prime, Target, Walmart and countless other retailers.

The National Retail Federation last holiday season found that 75% of all consumers expect free shipping on orders under $50, compared with 68% the year before. And 65% look up shipping costs even before adding items to their cart.

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