Amex Inks Deals with ShopRunner, Chegg — on the Downlow

  • JJ Hornblass
  • July 18, 2013
  • 1

shutterstock_146024471American Express, it turns out, inked two important innovation deals last quarter — one with ShopRunner and the other with Chegg.

The news was buried in Amex’s second quarter earnings yesterday. How buried? Try towards the end of the company’s supplemental earnings information packet.

First, the ShopRunner deal. Amex signed a “multi-year” marketing agreement with ShopRunner to offer American Express credit and charge cardholders one year of free two-day shipping at ShopRunner’s more than 70 retail partners, such as Toys”R”Us, PetSmart, drugstore.com, and Sports Authority, among others. This is yet another deal that puts Amex closer to retail purchasing. Some of you may recall that ShopRunner is helmed by Scott Thompson, former CEO of PayPal.

Amex’s deal last quarter with Chegg, the student hub, “empower[s] students to better manage their finances.” According to Amex, the agreement allows customers of Chegg, which connects students to the tools they need like homework help, scholarships, eTextbook and textbook options and more, to receive payments through the company’s textbook buyback program through Serve from American Express. “Students quickly gain access to the money that Chegg pays them for textbooks by sending funds to their Serve Digital Prepaid Account,” Amex said it in the footnote to its second quarter earnings. As of 2011, Chegg was renting textbooks on 6,400 college campuses.

The Chegg deal points to the centrality of Serve and other digital strategies to Amex’s growth strategy. Specifically, the company pointed out in an earnings footnote that a big chunk of American Express’s success “will depend” on:

The ability of the Company to generate $3 billion in fee revenue by the end of 2014, which will depend on the Company’s success in implementing its strategy to increase fee revenue through growing its existing fee-based businesses such as insurance products and other services, acquiring companies with complementary businesses and capabilities, and in introducing new business initiatives, such as Bluebird, Loyalty Partner, Accertify and the Company’s digital initiatives; [and]

The ability of the Company to maintain and expand its presence in the digital payments space, including online and mobile channels, which will depend on the Company’s success in evolving its business models and processes for the digital environment, building partnerships and executing programs with companies, and utilizing digital capabilities that can be leveraged for future growth.

That’s laying it on the line.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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