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FedEx makes play for e-commerce in Home Hardware deal

CBC

Federal Express Canada Ltd. is planning to build a nationwide network of shipping centres geared to e-commerce through a deal with Home Hardware Stores Ltd.

The Mississauga, Ont.-based courier company announced the agreement with Home Hardware Wednesday that could lead to the creation of shipping centres at the 1,100 Home Hardware stores across Canada.

FedEx is trying to woo delivery business from small online retailers and home businesses by giving them and their customers access to a local shipping centre.

FedEx called the deal with Home Hardware the largest expansion of its retail network in Canada to date.

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Home Hardware stores are operated by independent owners and it will be up to each individual dealer to decide whether to host a FedEx centre.

Kitchener, Ont.-based Home Hardware said it will explain the benefits to its dealer-operators and expects about 100 to open shipping centres in the "first wave."

"This alliance will bring more traffic into our stores as well as increase convenience for all customers," said Home Hardware president and CEO Paul Straus in a press statement.

FedEx Canada president Lisa Lisson said the company is looking to e-commerce to build its business over the next few years.

If the network rolls out smoothly, it will put FedEx into more direct competition with Canada Post for local e-commerce business. Canada Post has moved to grab online parcel delivery business through arrangements with Wal-Mart, Best Buy and other retailers.

The Home Hardware FedEx shipping centres will offer neighbourhood drop-off and pick-up services for online customers and retailers.

FedEx estimated the value of e-commerce at $1 trillion in global sales by 2016, estimating about 60 per cent of Canadians did some online shopping during the 2013 holiday season.

The new FedEx locations will look very similar to the Canada Post outlets that are tucked into stores operated by Shoppers Drug Mart, Jean Coutu and others such as convenience stores and news stands across the country. They would operate similar to the FedEx storefronts that are situated primarily in urban centres.

"It offers us opportunity to expand into areas where we might be a little under-penetrated," said FedEx spokesman James Anderson.

"Smaller stores, or stores in rural areas, are something that we find very intriguing and we're certainly interested in engaging."