Is It A Gimmick? Experts Explore The Strategy Behind 'Free Shipping'
PHILADELPHIA (CBS) -- This holiday season, online sales are expected to hit an historic high.
"It's more convenient," said Philadelphia resident Reika.
"I don't want to be bothered with so many people," added Tyeisha of Philly.
Especially when you can take advantage of so many offers at home or on the go, like free shipping, for instance.
"I'm a college student, so I make very little money. Anything to reduce the cost is helpful," said University of Pennsylvania student Simon Miller.
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New research shows free shipping tops consumer wish lists, putting it ahead of money off, even buy one, get one promotions. But, why?
"Everyone loves the word free," said Americus Reed, a marketing professor at University of Pennsylvania's Wharton School.
He says consumers are led to believe they're getting a special deal, when in fact, it's often built in.
"I don't think they're saving money, really. I think the retailers are smart enough to capture costs in other ways," said Reed.
From marking up the price to enticing customers to spend a certain amount.
"They can figure out where they can get you at that threshold… where you're willing to buy more to get additional psychological delight from free shipping," Reed said.
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As long as they can deliver.
With free and fast shipping becoming a growing trend, Reed says retailers should be careful about setting unrealistic consumer expectations. After all, no one wants to hear their item is delayed or worse, out of stock.
