E-tailers lure customers with discounts

Sunday, December 16, 2001

Online holiday traffic might be surging, but e-tailers, like their brick and mortar counterparts, are working hard to turn cautious browsers into shoppers.

The big challenge for e-commerce sites -- many of which are aiming at profitability this holiday -- is to offer price discounts or free shipping deals without hurting earnings. That will be a particularly difficult feat because even when consumers are buying, they tend to spend less than they did a year ago.

Many online retailers have resurrected free shipping offers, which proved more effective in the past than marking down merchandise. But this season, they're not being as generous.

Luxury e-tailer Ashford.com, which provided unlimited free shipping last year, now offers it only for purchases of $1,000 or more. For Toysrus.com, it's $150, up from $100 a year ago.

Many e-tailers have decided to use heavier price discounting to woo consumers nervous about job security amid thousands of layoffs.

Two months ago, Amazon.com increased its everyday discounting to 30 percent off almost all books over $20. Bezos believes the company can afford the discounting because it has worked hard to increase operating efficiencies.

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