FedEx is shaking up the e-commerce space. The nationwide carrier on Tuesday announced a partnership with e-commerce software titan Salesforce to provide an end-to-end e-commerce and supply chain management solution. Shares of both companies are down following the news.
The new offering, which the companies expect will become available to consumers in the spring of 2022, integrates Salesforce (NYSE: CRM) Commerce Cloud and Salesforce Order Management with supply chain capabilities from FedEx (NYSE: FDX) and its e-commerce subsidiary ShopRunner. With all of those services bundled into one platform, companies will have access to advanced insights and supply chain optimization tools while consumers can expect real-time order visibility and two-day shipping.
“We are in a world of commerce anytime and anywhere,” said Lidiane Jones, executive vice president and general manager of Salesforce Commerce Cloud. “Commerce Cloud and Order Management let companies sell wherever their customers shop and fulfill on any channel. Pairing that with FedEx’s logistics capabilities lets us deliver an even faster, easier and cost-efficient experience for our customers. Now retailers can better meet shoppers’ two-day shipping expectations without accumulating extensive costs or sacrificing their time or brand.”
A Swiss Army knife solution
The new partnership is all about improving the customer experience and it gives Salesforce’s Commerce Cloud a big upgrade in that regard. The e-commerce platform, which already harnessed Salesforce Order Management and Einstein AI technology, is now a Swiss Army knife of a service, looping in data-driven supply chain insights, a nationwide shipping network and ShopRunner e-commerce capabilities from FedEx.
The combined solution will allow companies to innovate and automate processes while simultaneously handling inflated demand. They’ll have access to the millions of customers already shopping on FedEx’s ShopRunner platform, as well as advanced insights that will increase order visibility. What’s more, companies can now use FedEx’s bevy of supply chain tools intended to optimize transportation and fulfillment, increase supply chain intelligence, simplify shipping, manage costs and boost agility.
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“Brands and merchants have to move quicker than ever to meet their customers’ expectations,” said Claude Russ, COO of FedEx Dataworks and CEO of ShopRunner. “With the combined power of Salesforce and FedEx, we will provide them the speed, control and economics they need to help them exceed those expectations. From optimizing their inventory management and fulfillment operations to faster delivery and attracting new buyers, together we’re helping change the game so brands and merchants can have greater control over the links of their supply chain and increase their competitiveness.”
For the companies’ end users, the prospects are just as tantalizing. End consumers will be able to take advantage of two-day shipping, label-less returns, access to return packaging at FedEx locations and real-time insights on delivery dates and times all the way from the shopping cart to the arrival date.
Shifting tides
The business landscape is changing, and businesses are being forced to change with it. E-commerce sales topped $200 billion in Q2 2021, and notably, they grew 9.3% from Q2 2020, the first full quarter to be impacted by heightened e-commerce volume due to COVID-19.
But that increased demand hasn’t led consumers to expect shortages or delays — if anything, they expect better service. Per a June report from global consulting firm AlixPartners, customers say that the maximum amount of time they’re willing to wait for free deliveries is just 3.3 days. That’s down from 3.8 days in 2020 and from 5.5 days about a decade ago. Additionally, data from Omnitracs shows that 65% of consumers are willing to pay extra for shorter delivery times.
The new solution from FedEx and Salesforce aims to help businesses balance that inflated demand with heightened consumer expectations. With an integrated platform, companies don’t need to scramble to manage all of their different operations using different platforms or providers. Instead, the services are all owned, and they’re all in one place, enabling them to optimize their supply chain and fulfillment capabilities while focusing on providing an excellent customer experience.