Online shopping has quickly woven itself into the fabric of America's holiday season. And in the competitive world of e-commerce, free and fast shipping has become this year's holy grail.
FedEx said it expects Cyber Monday -- the Monday after Thanksgiving -- to be its busiest day of the year, a first for the delivery giant. Falling this year on Dec. 2, Cyber Monday is when retailers typically break out online deals, slash prices and offer quick delivery for holiday shopping. FedEx will ship more than 22 million packages that day, an increase of 11 percent from last year, the company said.
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FedEx's busiest day is usually closer to Christmas, which makes the shift toward Thanksgiving significant, said Patrick Fitzgerald, senior vice president of integrated marketing and communications.
Holiday sales are forecast to rise nearly 4 percent this year, but online sales are expected to grow by as much as 15 percent, according to projections by the National Retail Federation.
The holiday shopper has embraced online bargain-hunting as a way to save money in a still-weak economy, according to consumer surveys by consulting firms Accenture and Deloitte. Free shipping tops the list of deals shoppers look for, the surveys said.
This month, Wal-Mart announced that it would begin offering free shipping for all purchases worth $50 or more. And eBay is touting one-hour delivery times in certain markets, in addition to free delivery on certain dates leading up to Christmas.
Amazon has focused on building more distribution centers across the country and announced this week that one is planned in Baltimore. The retail behemoth also announced this week that it was raising its minimum purchase amount to qualify for free shipping to $35, the first change in more than a decade.
Critical for retailers this year is a shortened holiday season. With only four weeks between Thanksgiving and Christmas, compared with five last year, both online and bricks-and-mortar retailers are trying to maximize sales, analysts say.
In order to fulfill their shipping promises, online retailers generally use companies such as FedEx or competitor United Parcel Service. FedEx said it expects more than 85 million shipments worldwide in the first week of December, an increase of 13 percent from last year. On an average day, the company ships about 10 million packages, Fitzgerald said.