Tuesday, 2 August 2011

Myer woos online shoppers with free shipping

MYER wants shoppers back and is prepared to suffer for it.

Slashing prices hasn’t stemmed the flow of Aussies to overseas websites, where the goods are cheap thanks to a strong Australian dollar, so the department store is trying another strategy: free shipping.

Fairfax reports that Myers is dumping shipping and handling costs for its website, while its main rival, David Jones, is also reviewing its pricing policy.

The Commonwealth Bank estimates Australians spent $9.5 billion last year on online shopping sites, $4.2 billion of it on overseas sites and the remaining $5.3 billion at Australian online stores.

Myer boss Bernie Brookes said while he was aware free shipping would come at a cost, but the department store had “run the numbers” and believed the model would work.

''We do about $5 million a year online,'' Mr Brookes said. ''The plan is to increase that closer to $50 million a year very quickly. This is something we have been planning for a while now.

A Myer spokesman said free online shipping could raise revenue five to ten fold, according to research conducted by the company.

David Jones also is reconsidering the pricing of its online shipping and looking into greater use of iPhone apps.


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