The acquisition tightens FedEx’s embrace of surging ecommerce deliveries, adding to earlier moves such as adopting seven-day service and investing in handling large residential packages. ShopRunner allows online shoppers to choose its two-day shipping and free returns service for brands including Bloomingdale’s, Saks Fifth Avenue and Under Armour.

(Bloomberg)—FedEx Corp. has agreed to acquire ShopRunner, an ecommerce service that provides shipping for more than 100 brands, as the courier seeks to deepen its ties with online shoppers.

ShopRunner will operate as a subsidiary of FedEx Services once the deal is complete, the delivery giant said in a statement Wednesday. FedEx didn’t provide financial terms of the transaction, which is expected to close by yearend.

The acquisition tightens FedEx’s embrace of surging ecommerce deliveries, adding to earlier moves such as adopting seven-day service and investing in handling large residential packages. ShopRunner allows online shoppers to choose its two-day shipping and free returns service for brands including Bloomingdale’s, Saks Fifth Avenue and Under Armour.

ShopRunner’s annual membership is $79 for consumers, but it does also offer free memberships via its payment channel partnerships with American Express, PayPal Inc. and Yahoo. “ShopRunner also shares in the success of its retail partners on sales they deliver,” the company says, without revealing more.

The deal is part of FedEx’s “continued efforts to create an open, collaborative e-commerce ecosystem that helps merchants deliver seamless experiences for their customers,” said Chief Operating Officer Raj Subramaniam.

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In the three-month period ending Aug. 31, sales at FedEx’s U.S. ground-delivery unit jumped 36% to $7 billion from a year earlier.

The purchase of ShopRunner “should help it further penetrate” the ecommerce market, Allison Landry, an analyst with Credit Suisse Group AG, said in a note to clients.

ShopRunner acquired and then shuttered fashion marketplace app Spring in May 2019—less than a year after acquiring it. It then brought many of Spring’s more than 2 million SKUs from over 2,000 brands to District, the online marketplace ShopRunner launched during the 2018 holiday season, says ShopRunner CEO Sam Yagan.

ShopRunner was built on the foundation of being “Amazon Prime for everyone else,” Yagan says, by offering free two-day shipping to its members. In the past, it has focused on adding more layers of services for its retailers so they can have more amenities and better access to customer data.

Stephanie Crets contributed to this report.

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