In a surprising move, American Eagle Outfitters has acquired a logistics startup company, AirTerra. Co-Founded by Brent Beabout, a former e-commerce logistics expert from Walmart and Nordstrom, AirTerra’s goal is to “level the playing field for small and mid-size shippers.”
AirTerra does so by accumulating multiple packages from multiple senders for better prices and takes designing efficient shipping routes into their own hands. They also use regional parcel carriers and USPS to complete their shipping.
But it’s not that common for players in the retail industry to own their own logistics systems. Most companies outsource their supply chain systems, so what caused American Eagle to quietly acquire AirTerra?
With consumers’ reliance on online shopping continuing to increase, it makes sense that American Eagle wants to pull ahead of their competition, and have an advantage over them in terms of logistics. E-commerce delivery fees can be incredibly expensive, so by merging AirTerra’s services with theirs, AEO can begin to operate independently.
It’s also a part of AEO’s rolling supply chain transformation plan. Their goals include: opening smaller distribution centres, increasing work efficiency, and cutting down shipping times. The company actually succeeded in cutting down 1.5 days of the average shipping time by June.
Not to mention, AEO began offering free same-day shipping to 50 major cities in June! The partnership with ShopRunner began last October, and started with only 6 cities, and has expanded widely in just a few months.
AEO hopes to become faster, more efficient, and provide the best customer experience by working with AirTerra.