Amex Inks Deals with ShopRunner, Chegg — on the Downlow

July 18, 2013
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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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One Response to Amex Inks Deals with ShopRunner, Chegg — on the Downlow

  1. [...] American Express, it turns out, inked two important innovation deals last quarter — one with ShopRunner and the other with Chegg. The news was buried in  [...]

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