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Target will offer free shipping on all holiday items starting today

Target will offer free shipping for the first time on all items bought during the holidays to try and compete better with the likes of Amazon. Target says its free shipping starts Wednesday and will last through Dec. 20. 

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Damian Dovarganes/AP/File
Shoppers arrive at a Target store in Los Angeles. Starting Wednesday, Oct. 22, 2014, Target will offer free shipping on all items purchased for the holidays, even $6 lipsticks.

Target聽Corp. is offering for the first time free holiday聽shipping聽on all items, including even $6 lipsticks, as the discounter throws itself in the ring to compete better with the likes of Amazon.

The Minneapolis-based chain said its free聽shipping聽offer starts Wednesday and will last through Dec. 20. The move is unusually early for a retailer 鈥 coming weeks before the official holiday season kickoff over the Thanksgiving weekend 鈥 and could squeeze聽Target's聽profit margins. But the strategy underscores how retailers are willing to do whatever it takes to grab shoppers in the holiday shopping season, which accounts for about 20 percent of the retail industry's total sales.

The retailer is also looking to bounce back from a disastrous 2013 holiday season, when a data breach during the early weeks of the holiday rush compromised the information of up to 110 million shoppers from late November to early December. The breach cost Target $148 million, and profits for the first six months of the fiscal year were down 41 percent from a year ago.聽

"We know聽shipping聽costs play a big role in online purchasing decisions .... We believe our free聽shipping聽offer will create excitement and incremental sales for聽Target," said Kathee Tesija,聽Target's聽executive vice president and chief merchandising officer.

The incentive comes four months after聽Target聽unveiled a permanent free聽shipping聽offer for those spending at least $50 online, a strategy the company said has had strong reception.

The free聽shipping聽holiday incentive is one of a number of enticements that聽Target聽is pushing, from more trendy merchandise to spiffed up apps, to win back consumers as it deals with its own problems as well as industrywide challenges.

Target, along with other big-box stores, is trying to woo back customers increasingly researching and buying on their smartphones and tablets. It's also grappling with a still slowly recovering economy.

But聽Target聽is also wrestling with its own specific problems that cost its former CEO his job and led to the hiring of PepsiCo executive Brian Cornell in early August. It's trying to move beyond a massive data breach that hurt holiday sales last year. And it's also trying to restore the discounter's reputation as a cheap chic fashion purveyor.

Target聽also aims to play catch up with rivals who have been offering services that cater to shoppers who want to jump back and forth from stores to their smartphone.聽Target聽is now聽shipping聽products directly from a network of 135 stores in 38 markets so online customers can get items within one day of standard delivery. It's also spending 50 percent more on digital advertising this holiday season compared with last year.

Target's聽online sales increased 30 percent in the latest quarter ended Aug. 2, though analysts estimate it only represents less than 2 percent of total sales.

"We see mobile as a front door to the brand," said Cornell.

As for free聽shipping, only a handful of retailers including Neiman Marcus and L.L. Bean offer that all year round without any thresholds. But Forrester analyst Sucharita Mulpuru says more and more retailers are offering special free聽shipping聽promotions that have become a cost of doing business. Such expectations come as online king Amazon.com has been beefing up services for its $99 Prime Loyalty program that includes free two-day聽shipping聽on many of its items.

Mulpuru estimates that free聽shipping聽costs stores $3 to $6 per order.

"It's a slippery slope," Mulpuru said. But she noted, "(Target) doesn't want to lose any more market share to the online channel."

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