Target to make same-day delivery push with Shipt acquisition
Target is serious about same-day delivery. Yesterday, the retailer announced it has agreed to acquire Shipt, the online same-day delivery platform, for $550 million in cash. Shipt hires local shoppers to fulfill online orders from physical store locations.
With the deal, Target expects to offer same-day delivery to customers through roughly half its stores by early next year. The majority of its stores will offer the service before the start of the 2018 holiday season.
In the beginning, the retailer’s customers will be able to purchase groceries, electronics, home and other products with plans to expand into other products and categories over time. Target said it would offer same-day delivery on all major categories by the end of 2019. Customers who pay a $99 annual fee will receive free same-day shipping from Shipt in markets where the service is available.
“We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target, whether it’s ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program,” said John Mulligan, Target’s chief operating officer, in a statement. “With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country.”
Under the deal, Shipt will be a wholly-owned subsidiary of Target while continuing to operate independently. The company uses 20,000 personal shoppers to fulfill orders for same-day delivery for a variety of retailers in more than 72 markets around the U.S. Working with Target will enable Shipt to achieve the scale needed to further expand across the country.
“We’ll continue growing our marketplace and membership base, working with a variety of retailers to drive scale and efficiencies,” said Bill Smith, Shipt’s founder and CEO. “We look forward to introducing Target guests to the convenience of our same-day delivery services, with the level of personal attention only Shipt can provide.”
- Target to Acquire Same-Day Delivery Platform Shipt, Inc. to Bolster Fulfillment Capabilities – Target Corp./PRNewsire
- Here’s How Acquiring Shiot Will Bring Same-Day Delivery to About Half of Target Stores in Early 2018 – Target Corp.
DISCUSSION QUESTIONS: What will Target’s acquisition of Shipt mean for the two companies? What will it mean for those that compete with Target and Shipt?