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The move comes amid growth in Canadian web sales.
FedEx Corp. will put full-service shipping centers inside Home Hardware Ltd. Stores in a move billed as responding to the rising e-commerce demand among Canadian consumers.
The home improvement chain has some 1,100 stores in Canada and says it will work with Federal Express Canada Ltd. to roll out “FedEx Authorized ShipCentres” to those stores throughout 2014. It was not immediately clear how many stores would get the centers initially or if the FedEx centers would be deployed to the entire chain. Consumers will use the centers to pack and ship packages for FedEx delivery and to pick up FedEx deliveries.
"The rise in e-commerce has presented both Home Hardware and FedEx Express Canada an opportunity to enhance our respective business models," says Lisa Lisson, president of FedEx Express Canada. "Our alliance with Home Hardware expands our retail footprint across Canada, giving online shoppers more points-of-access options to meet their shipping needs.”
It’s unclear if this development will alter the e-commerce strategy of Home Hardware. Home Hardware operates an e-commerce site but does not enable online transactions. Consumers instead can browse products and check prices for their local stores. That’s because Home Hardware is a network of more than 1,000 stores, each locally owned. “We are a cooperative of stores,” a company official previously explained. “The stores have the relationships with the customers.”
Home Hardware expects the FedEx shipping centers could lead to more store foot traffic and, presumably, sales. “This alliance will bring more traffic into our stores as well as increase convenience for all customers," says Paul Straus, the chain’s president and CEO.
The FedEx move into Home Hardware comes as e-commerce sales in Canada are set to grow at least 10% annually over the next five years, topping C$33.8 billion ($32.8 billion) in 2018, up from the C$20.6 billion ($20 billion) in 2013, according to Forrester Research Inc. Online sales as a proportion of total Canadian retail sales will grow to 10% in 2018 from 7% last year.
That growth has attracted other fulfillment activity. Earlier this month, eBay Inc.’s e-commerce technology and services division, eBay Enterprise, said would open a new 150,000-square-foot fulfillment center in Ontario, Canada. EBay already operates a similar facility in Canada. The new warehouse is set to open within the second quarter and will pick, pack and ship orders for eight retailers. The warehouse also will support fast shipment of orders to Canadian consumers.