FedEx’s eCommerce Battle Hinges on ShopRunner and a ‘Critical Mass’ of Retailers

More than 80 years ago, Winston Churchill said war would be waged on multiple fronts: the beaches, the fields, the streets and in the air.

In today’s digital age, the battle for eCommerce is waged, similarly, across several areas of engagement — the online search, the checkout, the fulfillment.

Amazon is but one easy target here. There’s no shortage of firms gunning for position against the eCommerce colossus. And in doing so, they might strive to reinvent their business models. In some cases, acquisitions are a way to get there, to bring same-day delivery into the fold, such as when Target bought Shipt back in 2017.

FedEx is a recent standout in the build vs. buy — make that buy and build — efforts of firms to become larger eCommerce players.

After Amazon

As noted here, FedEx ended its delivery pact with Amazon, which has, for years, been crafting its own logistics network.

FedEx, of course, has its own last-mile and logistics operations in place. The company’s SEC filings describe a freight segment that at the end of the last fiscal year was operating nearly 30,000 vehicles from a network of approximately 390 service centers.

The firm’s eCommerce ambitions, which would link those last-mile activities to consumer/merchant interactions, are becoming crystallized.

As reported earlier this month, FedEx said its fdx platform will debut this fall, helping with demand, conversion, fulfillment, post-purchase and returns. The ShopRunner member network is an integral part of the move. FedEx bought ShopRunner in 2020. ShopRunner was merged into FedEx’s Dataworks operations last year. And per the company’s SEC language, the data operations are focused on improving “the efficiency of the FedEx network and our customers’ supply chains, as well as the end-to-end experience of our customers … We believe the complementary nature of ShopRunner’s pre-purchase offerings combined with FedEx’s post-purchase logistics intelligence enables brands and merchants to attract and engage consumers.”

A visit to the ShopRunner site exhorts users to download the new app, sign up for free membership (for FedEx Delivery Manager users), which in turn offers users two-day shipping, free returns and package tracking. In this way, FedEx is fashioning its own eCommerce ecosystem. ShopRunner has said it has more than 100 network partners, such as Kate Spade, Nieman Marcus and others.

The platform approach, through fdx, will need a continued stream of merchants to help compete with Amazon and with other eCommerce sites. An increased roster will help make up for at least some shipping difference, where both FedEx and UPS have trailed Amazon. Subscriptions, via ShopRunner — with the lure of discounts — may help bring FedEx more visibly into eCommerce, matching up against Fulfillment by Amazon. The fall launch of the fdx platform will come just in time for the holidays and will be a key litmus test.