Not so fast, Amazon.
Best Buy has raised the stakes in the online shopping wars by offering an eye-popping holiday promotion: free two-day delivery on thousands of items through its website.
The deal, which went live over the weekend, is an aggressive move by the Richfield-based electronics retailer to win over holiday shoppers who are especially concerned about shipping speed when making online purchases in the home stretch before Christmas. Best Buy has not yet announced an end date for the holiday delivery offer.
"Shipping is obviously important to our customers," said Jeff Shelman, a company spokesman. "We wanted to make sure customers can shop now and be very confident the items will be delivered well before the holidays."
Best Buy's aggressive shipping offer appears aimed in part at Amazon Prime members, who can get free two-day shipping, said Kevon Hills, vice president of research for StellaService, a firm that tracks retailers' shipping speed and customer service.
"But it also seems aimed at Target," he said, noting that the Minneapolis-based retailer raised eyebrows in late October when it rolled out free standard shipping on any size order during the holidays. "In this game of retail, it's a me-too environment."
Free shipping can take a toll on the bottom line, but it's one of the tools that some brick-and-mortar retailers are using to better compete with online retailers. Many major retailers have also been matching online prices.
On top of that, this holiday season more retailers are leveraging their vast network of stores, once regarded as a weakness, to get items to customers faster. One way has been through promoting their buy-online, pick-up-in-stores services. Another way has been through turning stores into distribution centers and shipping online orders from those stores instead of distant fulfillment centers.
Amazon, of course, has set the bar and consumers' expectations when it comes to speed and low prices while shopping online. Members of its $99-a-year Prime membership can get free two-day shipping year-round on eligible items.
For the most part, other retailers have not matched Target's bold promotion. But Target executives have said the free shipping deal has been very popular and is expected to help fuel a 40 percent increase in online sales in the retailer's fourth quarter.
Hills expects other retailers to begin offering free expedited shipping in the coming weeks, likely closer to Christmas to encourage last-minute orders from procrastinators.
He added that Best Buy has been gaining ground on Amazon when it comes to delivery speed in the past year since it rolled out ship-from-store capabilities to its entire network of stores. By doing so, Best Buy has managed to shave off a couple of days from the time it takes for items to be delivered via standard delivery. In the months leading up to the holidays, Best Buy has been neck-and-neck with Amazon by averaging about three days.
Other companies such as Wal-Mart, Macy's and Target have been improving their delivery speed as they have begun shipping online orders straight from their stores. But there have been initial hiccups.
Target, for example, began shipping from many of its stores in the fall, but it had a bumpy showing in StellaService's September and October monthly ratings for shipping speed. But Hills said Target appears to have figured out the kinks. In November, Hill said, Target upped its performance and had an impressive showing by taking just under three days to have items delivered.
For its free two-day holiday delivery promotion, Best Buy will use United Parcel Service to deliver items, as it normally does. The items will be shipped both from stores and regional fulfillment centers, Shelman said.
The offer does require a $35 minimum purchase, which is Best Buy's typical threshold for standard free shipping. And some items such as music, movies and pre-owned video games are not eligible.
Best Buy has not yet announced the date by which online orders must be placed to guarantee delivery by Christmas. Last year, it set Dec. 20 as the cutoff date, earlier than many other retailers.