Dive Brief:

• FedEx on Wednesday announced that it will acquire ShopRunner, an e-commerce platform that lets shoppers purchase from various sellers and brands. The deal is subject to regulatory approval, but both companies expect the acquisition to close by the end of this year.
• ShopRunner's pre-purchase offerings and FedEx's logistics intelligence will allow merchants to find online customers and give them a streamlined shopping experience, the company said in its announcement.
• ShopRunner will be run as a FedEx Services subsidiary. The Chicago-based e-commerce platform's omnichannel functions will help FedEx as it upgrades its customer experience using data and technology, per the company statement.

Dive Insight:

For ShopRunner, the FedEx acquisition allows the e-commerce platform to continue on with its current functions and make progress on creating new products and services, Sam Yagan, CEO of ShopRunner, said in a statement. FedEx wants to grow the ShopRunner platform and blend it with its existing digital and logistic capabilities, said Raj Subramaniam, president and chief operating officer at FedEx Corp. 

ShopRunner has undergone a series of changes over the past few years. The company has tried to create a platform that gives consumers a simple shopping experience and a network that benefits its seller partners, Yagan said. Last year, the platform acquired Precognitive, an AI fraud prevention startup, and landed an investment from UPS. The platform also began offering free two-day shipping and returns via Apple Pay last year.

With the COVID-19 pandemic driving consumers towards e-commerce, FedEx has said that it is prepared to handle the increase in parcel shipments thanks to its investments in optimization and automation. During the company's recent Peak Innovation Showcase, the company detailed the technology strategies it implemented to improve its delivery capabilities ahead of the 2020 holiday season, including automated deliveries, better package tracking and streamlining parcel loading.

The biggest impact for FedEx will be access to ShopRunner's data, which will provide the logistics provider a better understanding of the functioning of an e-commerce marketplace, according to a research note from UBS.

"We believe the logic for UPS's investment was similar in terms of capturing insights on ecommerce / marketplaces," UBS wrote.

Matt Leonard contributed to this report.