It seems gratuitous to write up my own panel session from Shop.org, but as I was moderator and not speaker, I think I have a little bit of leeway. I had an excellent panel to work with – the topic was Promotions in the Digital Channel: Free Shipping and Beyond and Jay Dunn of Bare Necessities, Fiona Dias of Shoprunner, and Amy Kennedy of Wine.com were my panelists.

Our panel’s intention was to dig into what it takes to make shipping-based promotions work – everything from free shipping as a promotion to shipping memberships similar to Amazon’s Prime – and Shoprunner’s service (Bare Necessities is a participating retailer), and Wine.com’s Steward-Ship service. Ms. Kennedy summed up the attraction and the risks associated with offering an all-you-can eat type of shipping program. On the plus side, it removes the friction associated with online purchasing, which can make the difference between browsing and purchasing. But it can also be a little nerve-wracking when some customers push it to the max – shipping everything, everywhere.

For the most part, however, the panelists concluded that while there are the occasional program members that cost far more than their membership fee (there is some irony associated with sticking it to The Man by buying more stuff), for the most part it’s a win-win situation for both retailer and customer – the customer makes back their investment in the program, and the retailer gains a customer who buys more, more often than the average non-member.

But Mr. Dunn raised a bigger point, which I’ll paraphrase. Promotions are like power, with all of the clichés you can think of to go with them. For example, “With great power comes great responsibility.” Ms. Kennedy covered that one with some of the uncertainty that surrounds how shoppers will respond to a shipping promotion – if the response is way more than you anticipated, then you’re going to have to take responsibility for some of the negative impacts on the organization – on your promotions budget, and on the supply chain.

Another good cliché about power/promotions: The more you use the power you have, the less power you have. This concept is the point that Mr. Dunn made. The more you use promotions, the less powerful those promotions become. If a retailer succumbs to the temptation to promote free shipping, then future offers that are discounts but not all the way to free won’t have the same power that they might have. Vendors understand this concept as “you can always lower the price, but you can almost never raise it.”

So how do you get consumers to buy if you want to avoid the race to the bottom that promotions imply? Especially when promotions seem to be the only way to get consumers to buy these days. The panelists agree: it’s about brand. Mr. Dunn said it best – eCommerce pure-play retailers have had it easy, up until the last few years. They have experienced major growth at a time when store-based retailers have struggled. But with increased price transparency, the uncertain economy, and the highly promotional atmosphere, retailers have to establish a strong brand promise – they have to provide a cohesive and clear set of reasons for consumers to buy where price or offer is a component of the decision, but it isn’t necessarily the main driver.

This is a gauntlet thrown down for retail. Store organizations have, for the most part, ignored online. Mobile shopping is now proving that the four walls of the store are entirely too permeable. Online retailers have argued that they operate in a world that is far more competitive than a store-based world – in part because of price transparency, and in part because shipping costs can be something of a penalty for online retailers competing against stores. Just as shoppers are proving that retailers can’t consider each channel alone, the challenge of promotions – particularly shipping promotions – are also proving (from the operations side) that retailers can’t consider each channel alone. Promotions alone – whether shipping-based or otherwise – are not enough to ensure long term success or any kind of differentiation. Someone can always find a way to offer a lower price.

Brand promise, on the other hand, especially well-executed brand promise, is a lot harder to copy – or undercut.