eBay agreed to acquire start-up Shutl Tuesday to help the e-commerce giant expand its same-day delivery delivery service and compete more with Amazon, the world's largest Internet retailer.
Shutl, founded four years ago by Tom Allason, uses a network of courier firms to deliver online orders from physical stores. The service covers most shoppers in the U.K., where the firm partners with retailers including Argos, Oasis and Karen Millen. It was planning a U.S. launch this year, before eBay came knocking.
eBay did not say how much it agreed to pay for Shutl. However, the addition will help eBay Now, the company's same-day deliver service.
Up until now, eBay Now used its own couriers, typically contractors who drove around in eBay Now-branded vehicles. But this approach would likely have been expensive to operate at scale.
In contrast, Shutl plugs into existing courier routes, adding e-commerce packages to deliveries of other items such as medical devices and legal documents. This reduces the cost of each extra online order delivered through Shutl's network.
In a statement Tuesday, eBay said Shutl's "technology, talent and expertise will help eBay to reach its goal of expanding its local delivery capabilities." Earlier this year, eBay Marketplaces President Devin Wenig said that the company was considering changing the way it worked with couriers to make eBay Now more scalable.
With Shutl on board, the company plans to expand eBay Now to 25 markets by the end of 2014. Chicago and Dallas are being added this year and select international markets, including London, will get the service next year.
Same-day delivery is the new e-commerce battle ground. Amazon has been building fulfillment centers nearer to large cities, increasing speculation that it will offer more same-day delivery services. The company is already expanding its AmazonFresh grocery service, which delivers food and other everyday consumer goods the same day or by early the next morning.
EBay's answer is to work with existing retailers and use their physical stores as mini-shipping hubs to fulfill online orders. Google is pursuing a similar strategy with its Shopping Express service.
Source : USA Today
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