Dive Brief:
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ShopRunner, operator of a mobile marketplace app and two-day free shipping service, announced that UPS has invested in the company, and also that ShopRunner separately has acquired artificial intelligence-based fraud prevention start-up Precognitive, according to a ShopRunner press release.
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UPS may ultimately offer its My Choice members free ShopRunner memberships as a result of the relationship, according to an exclusive report from Internet Retailer that was published prior to this week’s ShopRunner announcement.
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Following the Precognitive acquisition, ShopRunner plans to offer the start-up’s AI-based fraud detection and prevention tools to its own retailer partners for free, according to ShopRunner’s press release. The company’s system leverages “device intelligence, advanced behavioral analytics, and a real-time decision engine to help companies more accurately identify online fraud,” ShopRunner said.
Dive Insight:
UPS becomes the latest industry giant to invest in ShopRunner, following Alibaba, Kynetic and American Express as earlier investors. The logistics company’s investment in ShopRunner should not come as a complete surprise, as ShopRunner, in enabling free two-day-shipping and free returns, among other special deals and offers, has combined marketplace capabilities, retailer partnerships and membership and logistics benefits to rise in the sector.
Think of it as Amazon Prime, but cheaper (about $80 per year), independent and connected to a wider variety of big-name retailers because of that independence. In recent months, ShopRunner certainly has demonstrated some Amazon-like ambition to continue disrupting e-commerce and mobile commerce.
Late last year, for example, the company launched District, a mobile marketplace featuring high-end fashion and beauty products from 100 retailers. That came just a few weeks after ShopRunner acquired Spring, another online marketplace heavily focused on apparel from a variety of brands.
By adding to its reach and product selection through such moves, ShopRunner is getting closer to building its version of an online-only department store empire. Precognitive’s tools will strengthen ShopRunner’s ability to secure that and keep the trust of its retailer partners and customers.
It’s true that retailers from the brick-and-mortar world are getting better at e-commerce and fulfilling omnichannel strategies that tie together all of their channels and touchpoints, but an online retailer unencumbered by the costs of physical retail locations may offer the best bet toward a true competitive challenge to Amazon Prime’s wild popularity. ShopRunner isn’t there yet, but it has the backing of some big names and seems to be proceeding along the right path.
Correction: An earlier version of this article included unconfirmed financial details of ShopRunner's recent announcements and misspelled the name of the firm acquired. ShopRunner acquired Precognitive.