How do consumers view shipping costs ahead of the holidays?

With consumers beginning their holiday shopping, shipping prices are playing a key role.

Shipping costs represented the greatest year-over-year change in what drives consumers to convert online purchases, a 62% increase over last year, according to a new First Insight survey of 1,000 people.  

A third (32%) of survey respondents would be willing to spend at least $10 for shipping this holiday season. More than three-quarters of the older consumers surveyed (Gen X and Boomers) are willing to spend $20 or more on shipping, with only half of younger consumers saying the same. 

Regardless of how much consumers expect to spend on shipping, the survey found that the majority of online shoppers expect shipping times to take between three to five business days. 

Despite their willingness to spend, First Insight says consumers  want to believe they are getting a bargain, with 42% stating that they will need a minimum promotional offer of between 35 and 50% in order to entice them to make the online purchase.

“Targeting those consumers who are willing to spend more on shipping can reap countless rewards for retailers’ bottom and top lines this holiday season,” said Greg Petro, CEO of First Insight, a retail solutions firm. “These shoppers indicate a greater willingness to spend more overall during a time when retailers routinely provide substantial promotional offers. Furthermore, the days of high consumer expectation for free and fast shipping may be in the rear-view mirror and retailers may no longer have to automatically offer free shipping simply to remain competitive.”

Other insights in the survey include:

• 87% of shoppers say they are willing to pay full price for a gift that they know the recipient truly wants, compared to 79% of shoppers in 2022.
• Overall, the minimum promotional offer shoppers are looking for this year is 25-30%, consistent with last year.
• Of the shoppers who will cut back on spending this year, almost half will do so by looking for deals, while 39% will do so by buying less.
• Only 44% of respondents overall are concerned this year about the availability of products, compared to 55% last year.
• More shoppers prefer to shop both in-store and online this year, with 54% indicating that they will shop across both formats versus 46% last year.
• 28% of those surveyed plan to start their holiday shopping between November 1 and Thanksgiving, with just 19% waiting until Black Friday/Cyber Monday.
• 70% of shoppers say that they rarely return gifts from others, and when they do it’s primarily because it’s the wrong size. Only 13% return gifts because they don’t like them.