Conshohocken entrepreneurs make a splash in deliveries for online shopping

A screen grab from a Shoprunner video shows some of the retailers that will use the delivery service.
A screen grab from a Shoprunner video shows some of the retailers that will use the delivery service.
Posted: November 15, 2012

It is a problem so obvious you wonder why it hasn't already been solved: how to deliver online orders in a way that cuts the odds of missing a delivery or having a package stolen after drop-off to an apartment lobby, stoop, or an unsecured porch.

One way Americans have worked around this, as their love affair with online shopping has grown in recent years, is to have deliveries sent to the office, which requires discretion and an indulgent boss. Or they suck up the status quo, unglue missed-delivery slips from the front door, and hope that, the next time, the truck comes when someone is home.

This patchwork of imperfection has been identified by a band of Conshohocken entrepreneurs who are established masters of online selling: the founders of GSI Commerce, whose technology forms the bones of many retailers' Web operations.

Over the next several weeks, and with Michael Golden at the helm, this crew is unveiling a fix for those who believe that they don't live in a secure enough place to order online: PickupPoints by ShopRunner, a separate company from GSI Commerce.

For a membership fee, online shoppers get the choice of having a package sent to a store near their home. The program debuted in the Philadelphia area Monday with partners Toys R Us, 7-Eleven, and Olly Shoes, and is expected to be introduced at 120 of their locations over the next few weeks before going national in 2013.

Households in Philadelphia, and suburbanites within 20 miles of the nation's fifth-largest city, were chosen for the inaugural run. There is no charge for the first three months. ShopRunner memberships cost $79 annually.

How it works: ShopRunner loops retailers into a PickupPoints network. You order at any of those retailers' websites, and at checkout you are offered a list of places where you can pick up your booty.

The PickupPoints model could give Amazon.com a run for its money by creating a national network of pickup spots pegged to the very retailers being battered by Amazon.

Only people who order directly from the retailers in ShopRunner's network may choose the shipping alternative.

Buying a children's book from Amazon? No PickupPoints for you.

Buying the same book from Toys R Us? You're on.

ShopRunner tested the idea for five months last year at 20 Walgreens stores with 4,500 online customers in the Boston area.

"Those 4,500 people picked up 15,000 packages at Walgreens," said Golden, president and founder of ShopRunner. "And when they did, more than 60 percent of the time, they bought something else while they were there."

In order for the concept to work nationally, its architects say they must secure more than 20,000 locations. Golden and co-founder Michael Rubin, who also founded GSI Commerce with him years ago, have been corralling retailers into ShopRunner for two years now.

ShopRunner's raison d'etre, broadly, is to create an Amazon-like network for retailers that would give online shoppers a large offering of merchandise under one umbrella ( www.shoprunner.com) but direct shoppers to each retailer's website to make the actual purchase.

The first perk ShopRunner offered was free two-day shipping, in return for an annual fee, akin to what Amazon Prime does.

With partnerships already in the bag with 65 retailers - and seven more coming in the next few days - ShopRunner expects to have 18,000 to 20,000 stores as PickupPoints by the end of 2013.

Wharton marketing professor and e-commerce expert David Bell calls the idea "a potentially really interesting innovation" - capitalizing on a building customer desire to no longer grapple with deliveries.

Relay Foods ( www.relayfoods.com), he said, has found that grocery shoppers preferred to pick up orders rather than have them sent to their doorstep. (Relay made its Philadelphia debut a few months ago.)

"You can order anything from Whole Foods, plus a whole range of local purveyors, farmers. . . . They put everything in a truck, and then they put hundreds of orders at a Walmart parking lot and you can go pick them up," Bell said. "People actually prefer the pickup model to someone coming knocking on their door."

ShopRunner designed PickupPoints with that in mind.

"I think the ShopRunner concept is fascinating," Bell said. "I think this model hasn't been fully exploited, and I think it's a huge upside."


Contact Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com or @panaritism on Twitter.

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