Taking a collaborative approach to loyalty and a new spin on combating the continued market share growth of Amazon, major retailers joined forces earlier this week for the launch of ShopRunner, a loyalty program that offers members only benefits, including unlimited two-day shipping.
The service takes a page from Amazon Prime’s strategic playbook, but it spans across a wide variety of retailer participants, including Babies ‘R’ Us, Pet Smart, Dick’s Sporting Goods and GNC, among others. The service mirrors many of Amazon’s Prime offerings, but the ShopRunner service one-ups the online giant by offering free returns, members-only savings and a 2-day shipping guarantee.
While industry insiders are focused on ShopRunner’s potential to grab market share from Amazon, ShopRunner is also innovating an enhanced opportunity for retailers to optimize loyalty by connecting its brand with a new marketing option. ShopRunner offers a 30-day free trial for its service, with two-day shipping and free returns for an unlimited number of items from its retail partners. After the trial, ShopRunner, which is owned by GSI Commerce, Inc., will charge $79 a year for membership, offering members shipping from all participating retailers at no additional cost.
“After Amazon, GSI has the largest ecommerce fulfillment network (distribution centers, call centers, etc.),” said Marc Osofsky, VP of Marketing & Product Management at Optaros, an e-Commerce solutions provider that works with companies including RueLaLa, Macy’s and Neiman Marcus. “The back-end of making guaranteed two-day delivery is not easy. GSI also has a network of retailers that use it’s e-commerce platform, which makes it easier for them to rapidly get scale in terms of customers signed up for ShopRunner. I see GSI having the greatest potential at becoming a dominant third party of a competitive subscription service to Amazon Prime.”
In addition to the shipping perks and free returns, ShopRunner members can enjoy members-only offers that, according to ShopRunner, can yield over $300 in savings. The service also encourages sharing, as it offers $10 cash for every friend who activates a ShopRunner account, with no limit on the amount a member can make.
Retailers oversee shipping of their products but share with ShopRunner data about member purchases. Consumers also can go to ShopRunner.com to shop from retailers.
“Delivering this type of consumer value proposition is difficult for most retailers on a stand-alone basis,” said Jon Kapplow, CMO, ShopRunner. “Even large retailers lack the broad assortment, consumer reach and frequency required to create a compelling business proposition. We believe ShopRunner is the solution, and as we work to grow our retail partner network, we know that the value we will bring to the table for both the retailer — and their consumers — will help increase loyalty, accessibility and ultimately drive sales.” Kapplow said the company launched 15 retailers this past Tuesday and will have many more launched by the end of the year.
Participating retailers are expected to promote the partnership with ShopRunner through online and offline messaging, specifically in stores, according to Kapplow. “The best time to hit a consumer with the message is at checkout when they are staring at a large shipping charge number.,” Osofsky said.
For the current participating retailers who have existing loyalty programs, ShopRunner can be used in conjunction with those efforts as well. The new offering could potentially revolutionize the way retailers interact with their loyal customers. “Consumers prefer loyalty programs that span retailers (just look at how many options you have with frequent flyer miles) so I think ShopRunner has the potential to become a cross-retailer loyalty program platform,” Osofsky said.
Based on their launch date, Kapplow said ShopRunner will work with its retail partners to evaluate their needs and POS capabilities. “Over time, ShopRunner will offer a variety of multi-channel applications that extend beyond advertising to offer members significant ways they can leverage their ShopRunner membership in-store,” he said. “Imagine a shopper falls in love with an item in the store, but that particular store is out-of-stock. With ShopRunner, they can ship those items — fast and free — to their home or office. Other examples include those purchasing gifts they need to ship to others, and even vacationers/travelers who love to shop while traveling, but want the flexibility of being able to ship their items straight to their home or office at no additional charge. Beyond in-store usage, tactics like signage and bag stuffers are also on the docket.”
ShopRunner marks the second shared loyalty effort announced by major retailers this year. Back in August, the Shopkick mobile application emerged with a retail-centric approach app that upped the ante on “checking in” by synergizing location-based awareness with in-store offers and special rewards. Best Buy, American Eagle Outfitters, Macy’s and The Sports Authority have each tapped the service for an aggressive approach to loyalty.