Target goes after Amazon, cuts minimum shipping to $25

Steven Loeb · February 23, 2015 · Short URL:

The company now offers the lowest shipping requirement of all major online retailers

This past Christmas, Target did something kind of radical: it dropped all shipping fees on orders placed between October 22nd and December 20th. No minimum, no nothing. If you wanted to have a package of pens delivered to your door? It was free.

(I have to say that I took advantage of this promotion myself: I needed new razors and didn't feel like going to the store. It was incredibly convenient to have something delivered for $5)

That experiment seems to have been something of a revelation for the company: there are many places to buy things online now, so beyond price, which doesn't seem deviate too much from site to site, the thing that is going to lure them in will be the place with the best shipping options.

Now Target is going against the grain once again, announcing that it has decided to cut in half the minimum requirement for free shipping, going from $50 to $25.

In a statement, Jason Goldberger, president of and Mobile, attributed the decision directly to the success of the holiday promotion.

“We saw an enthusiastic response to our free shipping offer over the holidays. Now, whether guests are stocking up or doing fill-in shopping, we’ve enhanced our year-round shipping offer to be one of the best in all of retail," he said.

So just how successful was it? It allowed the company to set new sales records on both Thanksgiving and on Cyber Monday. Mobile accounted for 60 percent of traffic and, Cartwheel, Target’s digital coupon app, also added 2 million new users during that time period. People, it turns out, really hate paying for shipping.

As Target points out, there are already ways for customers to get free: by using a Target REDcard, its loyalty program. Plus, there is free in-store pickup, but that doesn't help much if you don't have time to actually shlep over there in the first place. 

What the new $25 minimum gives Target is a big leg up on some of its biggest online competitors.

For example, for years Amazon had the same price point that Target does now, but raised it to $35 in late 2013 (much to my consternation and disappointment). Walmart, meanwhile, has a minimum of $50, and Best Buy is set at $35. 

Having the lowest minimum shipping price not only makes the company the go-to for smaller orders, but it also helps put the company's infamous 2013 firmly in its rearview mirror.

In case you somehow forget, the cyber attack on Target occurred between November 27 and December 15 of 2013, and is said to have potentially affected up to an astounding 70 million customers who shopped there, as well as 40 million credit cards

That disaster badly dented Target's holidays that year, but as 2014 showed, give people something for free and they will come.

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