Best Buy hopes faster free shipping will rein in holiday procrastinators

Best Buy is once again doubling down on fast delivery in the final home stretch leading up to Christmas.

The Richfield-based electronics retailer is trying to rein in last-minute holiday shoppers by offering free two-day shipping for online orders placed by 10:30 a.m. Tuesday. Orders placed by that deadline are also expected to arrive in time for Christmas.

The free shipping upgrade is aimed at ushering in more sales in what is expected to be a lackluster season for the retailer.

Best Buy offered a similar promotion last year, but it started a week earlier and was only on orders totaling more than $35. One of its major competitors, Amazon, offers free two-day shipping to members of its $99-a-year Prime program.

Best Buy has also been offering free shipping on any size order since late October through Jan. 2. Minneapolis-based Target Corp. is also promoting free shipping on all online orders during the holiday shopping season. Its cutoff date for free delivery on items to arrive before Christmas is Dec. 21.

Two-day delivery isn't likely to be a stretch for Best Buy. The retailer has been making big strides in cutting down the delivery time of packages to customers' doorsteps in the last couple of years since it has begun shipping items directly from its stores instead of relying only on fulfillment centers that may be farther away.

In the latest rankings of top retailers by StellaService, a firm that tracks shipping speed, Best Buy landed at the top of the list for shipping speed. In the third quarter, it delivered 83 percent of packages within two days and 92 percent within four days, according to the firm. The average delivery time was 2.3 days, compared to the average of 4.2 days among the other retailers in the study.

"They are not only getting packages out the door faster, but are really using that store footprint really well to cut down on the transit speed with packages arriving typically in under two days," said Kevon Hills, StellaService's vice president of research.

Best Buy's free two-day shipping promotion is one of many ways retailers are trying to lure holiday shopping procrastinators. About 90 percent of shoppers said they had not yet finished their holiday shopping, according to a survey released this week by the National Retail Federation. Many said they were still figuring out what to buy while others said they were waiting for the best deals.

In order to try to win some of those customers, Kohl's is keeping its stores open for 170 consecutive hours. The marathon store hours began Thursday morning and will go through 6 p.m. Christmas Eve. Toys 'R' Us will keep its stores open until 2 a.m. starting this weekend and won't close the night before Christmas Eve.

Many other stores have extended holiday hours this weekend and next week.

In addition, many retailers are once again promoting their buy online pick up in store services to lure last-minute shoppers. Target says it will accept online orders up until 6 p.m. on Christmas Eve for items to be picked up in stores before they close at 10 p.m. or 11 p.m. that night.

The deadline for online orders to be picked up in stores at Best Buy is 4 p.m. on Christmas Eve. Its stores close at 6 p.m. that night.

Best Buy executives told analysts last month that they expect flat sales during the holiday shopping season amid a forecast for an industrywide decline in sales of consumer electronics.

Kavita Kumar • 612-673-4113