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L.L. Bean banks on boost in sales with free shipping

The move could force other retailers' to offer free shipping, adding momentum to the trend.

By DAVID SHARP The Associated Press

FREEPORT - As retailers increasingly turn to free shipping to lure customers, L.L. Bean is putting pressure on competitors by waiving shipping fees all the time, with no minimum orders.

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Lynn McGuire of Westbrook prepares merchandise for shipping at an L.L. Bean facility in Freeport on Thursday. The company’s chief marketing officer says research after research on free shipping shows customers say ‘this is how we want to shop.”

Photos by Pat Wellenbach/The Associated Press

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L.L. Bean’s free shipping offer was tested several times over the past three years. The offer is for standard two- to five-day shipping by UPS to Bean customers in the United States and Canada.

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Effective today, the outdoors and clothing retailer joins Zappos.com in offering year-round, no-strings-attached free shipping, going against the grain in an industry that's accustomed to selective free shipping offers, particularly around the holidays, sometimes tied to minimum purchases or vanity credit cards.

L.L. Bean had been toying with the idea for the past three years as it tested occasional free shipping, said Steve Fuller, the company's chief marketing officer.

"In research after research after research, the customers said, 'This is how we want to shop,'" Fuller said.

The offer is for standard two- to five-day shipping by UPS to L.L. Bean customers in the U.S. and Canada. Two-day shipping remains an option for $15, the company said. Neither offer applies to large items like canoes or furniture, which have to be delivered by freight.

Aware that customers want free shipping, retailers are increasingly providing it. In 2009, 30 to 35 percent of online holiday purchases involved free shipping; in the 2010 holiday season, the figure was 40 to 45 percent, said Andrew Lipsman, an analyst for comScore Inc., an Internet research firm.

Retailers like L.L. Bean closely examine the rate at which online customers discard their virtual shopping carts when they see the shipping fees.

"Three-quarters of consumers say that they will abandon their purchase when they can't get free shipping," Lipsman said.

Competitors are taking various approaches to shipping:

• Amazon.com offers unlimited two-day shipping through its $79-a-year Amazon Prime service.

• Walmart.com offers free shipping to some stores and plans to roll it out to all stores by June.

• Overstock.com offers free shipping for new customers on their first order.

• Macys.com offers free shipping with a minimum purchase of $99.

Tom Peers, a customer at L.L. Bean's flagship store in Freeport, said he thinks that other retailers will have to match Bean's offer to remain competitive.

"Everyone's looking for a hook," said Peers, who plans to take advantage of Bean's free shipping. "For me, there's no question it would give them an edge."

Lipsman said he doesn't think Bean's announcement on Thursday will open the free-shipping floodgates. But other retailers will take note, and it could add momentum to the trend, he said.

"They have to pay attention to something like that. They have to see how consumers are responding," Lipsman said. "When many retailers are offering something like this, and consumers come to expect it, then you could be on the outside looking in."

L.L. Bean, which had a 5.8 percent gain in sales in the past year, is counting on a further boost in sales this year from the free shipping offer, and hopes the sales increase will partially offset the cost of the shipping, Fuller said.

There will be no price increases due to the initiative, said company spokeswoman Carolyn Beem.

Previously, free shipping was available only to customers who held L.L. Bean-issued affinity credit cards. Those card holders will continue to get free monogramming, free returns, and points earned toward future Bean purchases, the company said.

For L.L. Bean, it's a return to the company's roots. When Leon Leonwood Bean started the company in 1912, he provided postpaid shipping to catalog recipients.

Bean is announcing the free shipping in an email blast to customers, and will follow up with a television campaign.

Next week, Bean will pick up the tab for riders on 10 Boston city buses that will be decorated as L.L. Bean packages and emblazoned with the phrase, "All L.L. Bean gear now gets a free ride."

The free rides are a week-only deal.