Best Buy is bringing back free shipping for holiday shoppers (BBY)

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Consumer electronics retailer Best Buy is offering free shipping on all online orders for the holidays for the second year in a row, reports Fortune.

The company usually requires a $35 minimum order to qualify for free shipping. Free shipping can help Best Buy capitalize on its growing e-commerce business, while competing more heavily with other online merchants during the busy holiday season.

Best Buy's digital sales are giving the company's performance a significant boost. While total revenue for Best Buy grew just 0.1% year-over-year (YoY) during Q2 2016, e-commerce revenue alone grew nearly 24% YoY, totaling $835 million. The company has been focusing heavily on building out its e-commerce operations, including increasing shipping speeds, improving search functionality, and streamlining the checkout process.

Offering free shipping ahead of the holiday season could help boost spending across Best Buy's existing shopper base, which is already engaged on its e-commerce site. Moreover, the attractive shipping option could onboard new shoppers and help pull customers away from competitors.

Best Buy's recent performance could stave off competitors during the holidays. Best Buy noted in its Q2 2016 earnings call that the online sales jump was partly driven by higher average order values and higher conversion rates, the latter of which was probably spurred by its shift to a more frictionless digital checkout process and responsive design. It's an encouraging sign that improvements to its digital purchase experience helped push online sales forward. 

However, while the retail chain represented nearly 23% of all sales in the consumer electronics market during 2015, Amazon has been slowly growing its share from just over 6% in 2010 to 17% in 2015, according to Quartz. Considering Best Buy's oscillating growth rate, the retailer should consider adding additional perks for online holiday shoppers, like extra points for rewards members or click and collect locations, in order to best Amazon and other competitors through the busy shopping season.

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