Retailers team up to take on Amazon's Web dominance
ShopRunner’s website streamlines shopping
Dozens of national retailers have joined GSI Commerce's ShopRunner platform to expand their e-commerce presence and compete online with Amazon.com.
GSI, which rolled out ShopRunner over the past month, established a cooperative of some 40 online retailers, including Toys “R” Us, Calvin Klein and PetSmart. Consumers can pay $79 per year to join the program and receive free, unlimited two-day shipping for purchases and returns.
The service also enables brands to keep their shipping costs down and improve their speed of delivery − two major hurdles facing retailers − but still offer consumers a full range of products.
“If you're going to pay $79 to a single website, you are not going to a site with 100,000 items,” said Fiona Dias, EVP of strategy and marketing at GSI Commerce. She said ShopRunner will boast 5 million items by the end of the year, including offerings from competitors like Dick's Sporting Goods and Sports Authority. “A few retailers have tried to do this on their own, but haven't had the volume to do it successfully.”
Yet even 5 million products is only a fraction of what is available on Amazon.com, which offers a similar flat-fee option for unlimited shipping through its Amazon Prime program. However, ShopRunner's stable of well-known brands still gives the service a unique value for online shoppers, said Dias.
“I'm excited as they continue to add more retailers to the consortium,” said Scott Laverty, chief information officer at Borders Group, which partnered with ShopRunner on its site on October 25. “ShopRunner's having some outstanding results so far in terms of the places they've rolled out, and conversion rates are higher than expected. In more selfish terms, I'm excited about the additional eyes that are going to be seeing Borders' site.”
While GSI operates a dedicated ShopRunner site allowing consumers to track all their orders through the platform, most memberships so far have originated at the individual retailer portals.
“If you sign in and we know who you are, it automatically gets you in there for expedited shipping,” said Laverty, who added that Borders also offers a seperate Borders Plus customer loyalty program.
However, even retailers that dominate the bricks-and-mortar markets may have a difficult time gaining customer loyalty online, according to industry experts.
“At the end of the day, it's less about, ‘I'm going to get it from ShopRunner or Amazon,' it's ‘Who's going to give me the best deal?'” said Sherif Mityas, a partner at management consultancy AT Kearney's retail practice. He added that beyond offering substantial product volume, ShopRunner will need to “add more stickiness”
to its site by promoting special offers and finding ways to keep customers coming back to browse or shop daily.
This is what Peter Cobb, cofounder and SVP of ShopRunner retail partner eBags, said he hopes to do in coming months.
“I'm sure there will be some bundling of promotions and things like that as well, such as ‘use ShopRunner and get an additional 10% off,'” he said. “Fair prices and ‘I want it quickly' are still most important to shoppers. We're really focused on that.”