Note to Amazon: Adobe and FedEx Are Helping Your Competitors Offer 2-Day Delivery

Software giant Adobe and delivery giant FedEx are joining forces to bring free two-day shipping to online merchants to help them better compete with the likes of Amazon and Walmart. In a new multi-year deal, ShopRunner—a membership service that offers free shipping and returns and was acquired by FedEx late last year—will be integrated into Adobe Commerce. Adobe recently announced commerce platform Magento, which it acquired for $1.7 billion in 2018, will be rebranded as Adobe Commerce. Per a press release, the integration will be available in the second half of 2021. “[Online vendors] could have [used ShopRunner] before the partnership, but we're really making it much, much easier,” said Peter Sheldon, senior director of commerce strategy at Adobe. “Any of our merchants who want to participate in the ShopRunner program … will be able to just download an extension from the Adobe Commerce marketplace [and] install that configuration.” Adobe Commerce merchants include brands like Rite Aid, Verizon, HP, Coca-Cola and Unilever, as well as Catbird and Tweezerman. Access to 'millions' According to Sheldon, participating Adobe vendors will gain access to “millions” of existing ShopRunner members. And, of course, they will also be able to offer free two-day shipping—and returns via FedEx. “One of the biggest causes of cart abandonment and purchase anxiety is shipping,” Sheldon said. “So having that clear, branded, free two-day shipping offering is huge for consumers.” In addition, he noted the value of partnering with FedEx comes with returns in particular. “The merchant can ship a pre-printed return label … in the box,” Sheldon said. “And so it makes it incredibly convenient for the consumer … who knows the return will be free.” In addition, FedEx will provide data to help merchants optimize fulfillment, such as when to ship orders and what service to use to ensure packages arrive within the two-day window in the most economical way possible. “There may be some orders that, because of where the shipping location is, we can happily ship by ground and still meet the two-day promise and so those are ones that are perhaps a lower priority for picking,” Sheldon added. “And there may be other orders that we have to pick immediately and get out of the door in the next 30 minutes because if we don't, then the only way to meet the two-day promise is to ship by air.” ‘Free shipping is sort of the norm’ Meanwhile, programs like Amazon Prime and Walmart+ have set what Sheldon called a “benchmark expectation in the market” for shipping. “Today, free shipping is sort of the norm,” he added. That means merchants who don’t offer free and/or two-day shipping are at a competitive disadvantage. “That is one of the biggest causes of purchase anxiety, it's one of the biggest causes of cart abandonment and site abandonment … and, quite frankly, it's a reason a lot of brands and retailers do decide to participate in Amazon's marketplace and offer their products—there's that ability to participate in the Prime program,” Sheldon said. Now, with free shipping via ShopRunner, Adobe merchants can keep pace with Amazon and Walmart. “Your average brand off the street or manufacturer, they don't have the scale of customer base to be able to charge for or even implement their own free shipping program,” Sheldon said. “That's an exclusive club that's pretty much for Walmart, Target and Amazon. And so we think the value prop of the ShopRunner program is giving everyone else—the long tail of merchants—access to a unified recognized free shipping program that they can promote.” It also gives Adobe a leg up on ecommerce darling Shopify, which Sheldon noted does not currently offer a free shipping program for its merchants.