Looking to win its share of electronics spending during what will be a tough holiday season, Best Buy (BY) is once again waiving its minimum order size for receiving free shipping.
The retailer, which last quarter surprised Wall Street with how well it withstood competition with Walmart (WMT) and Target (TGT), normally required a $35 minimum, but with the holiday retail wars underway, Best Buy is leaving nothing to chance. In 2015, Best Buy also waived the order minimum.
“While we have a very competitive shipping threshold the rest of the year and people can always buy online and pick up in a nearby Best Buy store, this is an opportunity for people to not have to worry about shipping prices as we head into the holidays,” Best Buy spokesman Jeff Shelman told CNBC. The move is important in helping Best Buy compete with Amazon.com (AMZN), whose Prime subscription service offers free two-day shipping regardless of order size.
In August, Best Buy reported a much higher than expected profit as comparable sales rose 0.8%, a welcome surprise for Wall Street analysts who had forecast a 0.6% fall, according to research firm Consensus Matrix. Best Buy benefited from a spike in health and wearable items like smartwatches.
But even as free shipping could dent profit margins Best Buy will be facing aggressive competition this holiday season: on top of Amazon, Best Buy will take on Walmart (WMT), which has promised to be aggressive on price in this category. And it will be facing Target, which suffered terrible electronics sales last quarter (pinning the blame on a lack of new products from Apple (APPLE)) and is determined to do better in a category that brings shoppers into stores
