Target has a new $550 million weapon to defeat Walmart and Amazon

Shipt will enable Target to deliver groceries to your door in hours.

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Shipt will enable Target to deliver groceries to your door in hours.
source
Facebook/Shipt

  • Target is buying Shipt, a platform that enables same-day delivery.
  • The acquisition will allow Target to deliver groceries, furniture, and other products on the day customers order them.
  • Shipt will continue to work with other retailers for now.

Target has announced plans to acquire the delivery platform Shipt, drastically increasing the retailer’s ability to make same-day deliveries across the US.

With a price of $550 million, it’s one of the largest acquisitions in Target’s history, the retailer said.

The deal is expected to enable same-day delivery at half of Target stores by early next year. Target plans to have a same-day-delivery offering in almost all stores and in all major US cities by the 2018 holiday season.

For now, the company says, same-day delivery will be limited to “groceries, essentials, home, electronics, and other products,” but Target plans to expand it to every product category in 2019.

Though Shipt will be a wholly owned Target subsidiary, it will still operate like a retail partner. Its employees will shop at Target stores – not warehouses – for delivery purposes, the way they do for other retailers.

Shipt requires a $99-a-year membership for unlimited deliveries. The current minimum for Shipt orders is $35, but Target may remove that for orders from its stores.

Shipt operates in 72 US cities, but it is likely to expand rapidly with Target’s help.

Same-day delivery is increasingly becoming the battlefield for retailers fighting to be most convenient for customers. Walmart has ramped up its same-day-delivery prowess with its acquisition of New York City-based Parcel. Best Buy also expanded its same-day-delivery program and reduced its cost. Amazon offers same-day delivery through its Prime Now program.