Aiming for Amazon: ShopRunner Launches Web Shipping Service for Retailers
Oct 6th 2010 10:30PM
Updated Oct 7th 2010 8:34AM
Online-retail giant Amazon.com tackled one of the key challenges to shopping online -- the shipping costs -- when it began offering free shipping for many orders starting back in 2002, as well as a flat-fee annual membership program for shipping starting in 2005. Now retailers such as toy-store chain Toys R Us and nutritional-supplement seller GNC are following suit.
They plan to offer free shipping through a new company, ShopRunner.com, which appears to have set its sights on taking U.S. e-commerce market share away from Amazon this holiday season. ShopRunner, which is owned by Pennsylvania-based GSI Commerce, launched Tuesday with a set of 15 retail partners, including Rockport, Bare Necessities and the NFL shop already using the service and an additional 27, such as Borders (BGP), Barnes & Noble (BKS) and Dick's Sporting Goods (DKS), signed up to launch soon.
The ShopRunner site is offering a 30-day free trial for its service, which will provide two-day shipping and free returns for an unlimited number of items from its retail partners. After the trial, ShopRunner will charge $79 a year for membership, which will get members shipping from all participating retailers at no additional cost.
By launching ShopRunner, GSI appears to be taking aim at Amazon, the world's largest online retailer. Amazon's Prime shipping service also charges subscribers $79 a year to ship all their orders from the website. In the second quarter, 169 million consumers visited retail websites, a 13% jump from the same period last year, and Amazon grew its market share of the growing market with a 21% increase in site visits, according to ComScore.
GSI is spending about $5 million on ShopRunner's launch and will split a some of the subscription revenue with its member companies, ShopRunner President Mike Golden told The Wall Street Journal. He declined to say how much stores are paying for the service.