FedEx Expands E-Commerce Footprint by Acquiring Shoprunner

December 4, 2020


To expand its e-commerce services, FedEx acquired ShopRunner. ShopRunner is a membership online platform in which retailers such as American Eagle, Nieman Marcus and Bloomingdale’s sells goods direct to consumers. For a $79 annual fee, ShopRunner members receive such benefits as free 2-day shipping, free return shipping and member-only deals.

New E-commerce Capabilities

“The acquisition aligns with our continued efforts to create an open, collaborative e-commerce ecosystem that helps merchants deliver seamless experiences for their customers,” said Raj Subramaniam, president and chief operating officer, FedEx Corporation. “We are committed to growing the ShopRunner platform and combining it with our global digital and logistics intelligence to create new possibilities in e-commerce.”

ShopRunner will operate as a subsidiary of FedEx Services which provides various functions including technology, communications, technical support, billing and sales and marketing.

“In pursuit of our purpose of creating the future of retail, we have built the foundation of a cross-brand ecosystem to create a simple shopping experience for consumers and to aggregate the scale of our network for our partners’ benefit,” ShopRunner CEO Sam Yagan said . “…FedEx will accelerate our existing capabilities and align with our goal of creating new products and services that advance a more open, collaborative e-commerce ecosystem.”

Competing with Amazon

Perceived as a move against Amazon, FedEx has been quickly building up its e-commerce capabilities since cutting its ties with Amazon last year when it declined to renew Amazon’s Ground and Express contracts. FedEx has since expanded its third-party pickup locations to include such retailers as Walgreens and Dollar General and has also established partnerships with other online platforms such as BigCommerce to offer discounted shipping and other perks through its FedEx Advantage Program.

Operationally, FedEx noted in its fiscal first quarter earnings announcement (period ending August 30) that it added six regional sort facilities and four new automated stations as well as expanded last mile delivery to seven days.

Will this all be enough to go up against Amazon? According to Ravi Shanker of Morgan Stanley, Amazon’s in-house parcel delivery group is forecasted to be about the same size as FedEx by the end of 2020 and as big as UPS by 2022.

Looking Forward

And what about UPS? Will we see UPS make a similar move? Could Shopify perhaps be of interest? FedEx’s acquisition of ShopRunner is a shift away from the types of acquisitions made by FedEx and UPS in the past in which the focus had been transportation or contract logistics related. The ShopRunner acquisition is an acknowledgement that e-commerce is now the battle ground and Amazon is the target.


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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FedEx Expands E-Commerce Footprint by Acquiring Shoprunner

December 4, 2020


To expand its e-commerce services, FedEx acquired ShopRunner. ShopRunner is a membership online platform in which retailers such as American Eagle, Nieman Marcus and Bloomingdale’s sells goods direct to consumers. For a $79 annual fee, ShopRunner members receive such benefits as free 2-day shipping, free return shipping and member-only deals.

New E-commerce Capabilities

“The acquisition aligns with our continued efforts to create an open, collaborative e-commerce ecosystem that helps merchants deliver seamless experiences for their customers,” said Raj Subramaniam, president and chief operating officer, FedEx Corporation. “We are committed to growing the ShopRunner platform and combining it with our global digital and logistics intelligence to create new possibilities in e-commerce.” ShopRunner will operate as a subsidiary of FedEx Services which provides various functions including technology, communications, technical support, billing and sales and marketing. “In pursuit of our purpose of creating the future of retail, we have built the foundation of a cross-brand ecosystem to create a simple shopping experience for consumers and to aggregate the scale of our network for our partners’ benefit,” ShopRunner CEO Sam Yagan said . “…FedEx will accelerate our existing capabilities and align with our goal of creating new products and services that advance a more open, collaborative e-commerce ecosystem.”

Competing with Amazon

Perceived as a move against Amazon, FedEx has been quickly building up its e-commerce capabilities since cutting its ties with Amazon last year when it declined to renew Amazon’s Ground and Express contracts. FedEx has since expanded its third-party pickup locations to include such retailers as Walgreens and Dollar General and has also established partnerships with other online platforms such as BigCommerce to offer discounted shipping and other perks through its FedEx Advantage Program. Operationally, FedEx noted in its fiscal first quarter earnings announcement (period ending August 30) that it added six regional sort facilities and four new automated stations as well as expanded last mile delivery to seven days. Will this all be enough to go up against Amazon? According to Ravi Shanker of Morgan Stanley, Amazon’s in-house parcel delivery group is forecasted to be about the same size as FedEx by the end of 2020 and as big as UPS by 2022.

Looking Forward

And what about UPS? Will we see UPS make a similar move? Could Shopify perhaps be of interest? FedEx’s acquisition of ShopRunner is a shift away from the types of acquisitions made by FedEx and UPS in the past in which the focus had been transportation or contract logistics related. The ShopRunner acquisition is an acknowledgement that e-commerce is now the battle ground and Amazon is the target.

ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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