Freeport, ME – First Major Online Retalier ‘L.L. Bean’ Stamps Out Shipping Cost For Good

Freeport, ME – As retailers increasingly turn to free shipping to lure customers, L.L. Bean on Thursday upped the ante by waiving shipping fees all the time, with no minimum order, putting pressure on rivals.

Effective Friday, the outdoors and clothing retailer joins Zappos.com in offering permanent, no-strings-attached free shipping, going against the grain in an industry accustomed to selective free shipping offers, particularly around the holidays, and sometimes tied to minimum purchases or vanity credit cards.

Steve Fuller, L.L. Bean’s chief marketing officer, said the company had been toying with the idea for the past three years as it tested occasional free shipping.

“In research after research after research, the customers said this is how we want to shop,” Fuller said.

Aware that customers want free shipping, retailers are increasingly providing it. In 2009, 30 to 35 percent of online holiday purchases involved free shipping; this past holiday season, the figure grew to 40 to 45 percent, said Andrew Lipsman, analyst at comScore Inc., an Internet research firm.

Retailers like L.L. Bean closely examine the rate at which online customers discard their “virtual” shopping carts when they see the shipping fees.

“Three-quarters of consumers say that they will abandon their purchase when they can’t get free shipping,” Lipsman said from his Chicago office.

Competitors are taking approaches to shipping:

— Amazon.com offers unlimited two-day shipping through its $79-a-year Amazon Prime service.

— Walmart.com offers free shipping to stores and plans to roll it out to all stores by June.

— Overstock.com: Offers free shipping for new customers on first order.

— Macys.com offers free shipping with a minimum purchase of $99.

Tom Peers, a customer dropping by L.L. Bean’s 24-hour flagship store, said he thought other retailers would have to match Bean’s offer to remain competitive.

“Everyone’s looking for a hook,” said Peers, who plans to take advantage of Bean’s free shipping. “For me, there’s no question it would give them an edge.”

Lipsman said he didn’t think Bean’s offer would open the free shipping floodgates. But other retailers will take note, and it could add momentum to the already-established trend, he said.

“They have to pay attention to something like that. They have to see how consumers are responding,” Lipsman said. “When many retailers are offering something like this, and consumers come to expect it, then you could be on the outside looking in,” Lipsman said.

L.L. Bean, which saw a 5.8 percent gain in sales this past year, is counting on a further boost in sales this year from the free shipping offer, and hopes the sales increase will partially offset the costs of providing free shipping, Fuller said.

The offer applies to standard 2- to 5-day shipping via UPS to L.L. Bean customers in the U.S. and Canada. Two-day shipping remains an option for $15, the company said. Neither offer applies to large items like canoes or furniture that have to be delivered by freight.

Previously, free shipping was available only to those customers who held an L.L. Bean-issued affinity credit card. Those card holders will continue to get free monogramming, free returns and points earned toward future Bean purchases, the company said.

For L.L. Bean, it’s a return to the company’s roots. When Leon Leonwood Bean started the company in 1912, he provided postpaid shipping to catalog recipients.

Bean is announcing the free shipping in an e-mail blast to customers, and will be following up with a television campaign. Next week, Bean will pick up the tab for riders on 10 Boston city buses decorated as L.L. Bean packages and emblazoned with the phrase, “All L.L. Bean gear now gets a free ride.” The free rides are a week-only deal.