There’s a new eCommerce player in town: FedEX. A longtime component in the broader eCommerce value chain, it’s now expanding its position from shipping & logistics to business-facing software. Specifically, it’s rolling out a sort of eCommerce as a service platform for SMBs to manage operations.
Known as FDX, it includes demand generation functions, order fulfillment, tracking, and what it calls post-purchase experiences (think: returns). The software provides a dashboard to manage these functions, which is hoped to democratize and streamline core components of eCommerce.
Announced this week, FedEx says that FDX is in private preview – sort of like a closed beta – with plans to fully roll out in Fall 2024. Meanwhile, besides posing competition to Amazon’s corresponding “Buy with Prime” program (more on that in a bit), this represents a logical expansion for the shipping giant.
Current Standards
Peeling back the details for FDX, they’re somewhat light initially (though not light on buzzwords). That said, it is clear that FedEx will logically converge several functions from under its existing umbrella. For example, its 2020 acquisition of eCommerce platform ShopRunner will factor into FDX.
This will give FDX the basis for a business-facing dashboard for eCommerce pages. These customer-facing pages will carry all the current standards such as product galleries, reviews, etc. And given FedEx’s competency with logistics, it will naturally include things like delivery estimates and tracking.
Another feature being touted is a sort of calculator that estimates the carbon emission impact for a given order. This could be some combination of following consumer demand and greenwashing, but it nonetheless points to the feature depth of the software, and that FedEx isn’t messing around.
FedEx was also notably clear in its announcement that FDX should not be seen as a sign that it’s moving into any customer-facing functions, such as launching a shopping marketplace. It wants to stay squarely within its lane of serving businesses, without any implications that it will compete with them.
Surface Area
Back to this move’s competitive angle, FDX seems to be positioned to take on Amazon’s eCommerce-as-a-service play. This includes Fulfilled by Amazon (FBA) and Buy with Prime (BWP). The latter lets merchants on Amazon (and now outside of Amazon), get up and running quickly with eCommerce.
For Amazon, BWP has been driven by a few motivating factors. At a high level, it’s all about revenue diversification – in this case SaaS – which is standard issue for tech giants that have to maintain high-scale revenue growth. The same factor drives AWS and Amazon advertising, among other things.
The other desired result for BWP is to expand Amazon’s eCommerce surface area, which in turn impacts market share and economies of scale. The eCommerce that runs through BWP – even though it’s for third-party merchants inside and outside of Amazon’s tent – is nonetheless fulfilled by Amazon.
So the big question is if FedEx’s new play can challenge Amazon’s market share. The two companies are increasingly competitive as Amazon no longer uses FedEx for shipping due to its own delivery operations. Meanwhile, SMBs can register to be a part of the FDX beta to try it on and see if it fits.
