Australia Post is quietly ending its “free” subscription Shipster shipping service, which has failed to gain critical mass despite the boom in online shopping.
Shipster, which is used by more than 70 retailers including Myer, Target, Harvey Norman and Accent Group, is no longer accepting new members and will close on July 31.
A notice on Shipster’s website said that while the service was popular with subscribers and retailers, it had become clear that it would not achieve the critical mass required to be self-sustaining.
The service launched in October 2017 and was designed to help retailers compete with Amazon’s Prime subscription service, which launched in June 2018.
For a monthly fee of $ 6.95 ($ 83.40 per year), consumers who spent more than $ 25 at any of the registered retailers were eligible for free shipping for up to 160 shipments per year, as long as the shipping cost per order did not exceed $ 20.
Shipster aimed to eliminate the “rubs” in online shopping that occurs when consumers arrive at checkout and are shocked at the cost of shipping.
Shipster went national in November 2017 after starting in Sydney, Melbourne and Brisbane, encouraging retailers large and small to register and use Australia Post delivery services.
Retailers paid the delivery charge but received a rebate on their share of the subscription charge, which was allocated according to the volume of orders received by the retailers.
Retailers such as Myer, Harvey Norman and Booktopia, which previously offered free shipping on orders over $ 100, could lower the threshold to $ 25.
Shipster expected to have 100 retailers on board by early 2018.
However, the cost of the subscription fee was not high enough to cover the cost of processing orders and Australia Post and retailers were partially subsidizing the service.
Many retailers, including Myer, Woolworths, David Jones, Target and Super Retail Group, are also encouraging consumers to “click and collect” to reduce shipping costs.
Australia Post said the e-commerce market has evolved rapidly and many e-commerce merchants now have their own subscription services.
“Free delivery is now more common and customer expectations have also changed,” said an Australia Post spokesperson.
“Where free shipping was once the barrier to online shopping, online shoppers are now focused on getting their items fast, they want more personalized experiences, more choice in how they receive their deliveries. and simpler returns.
“On this basis, we have made the decision to close the Shipster program on July 31 and focus our investment in innovation on developing new products and services to meet the evolving needs of Australian online shoppers.
Annual subscribers will receive a pro-rata refund for the remaining months on their subscription starting at the end of May.
This story was originally published by AFR. Read the original here.