Target buys Shipt to shore up delivery strategy
Target is buying Shipt, a same-day delivery platform, for $550 million in cash in its strategy to boost fulfillment efforts.
The news comes as retailers race to meet customer expectations now that they value speedy delivery over price, as Retail Customer Experience recently reported.
Target's acquisition will help the retailer offer same-day delivery at nearly half its stores by early 2018, according to a press release. Shipt will be a wholly owned subsidiary.
Target aims to provide same-day delivery of all major product categories by the end of 2019.
"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. 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," John Mulligan, executive vice president and chief operating officer for Target, said in the release.
The Alabama-based Shipt is a 3-year-old membership-based grocery market and same-day delivery business.
It taps a network of over 20,000 personal shoppers to fulfill orders from various retailers and deliver within hours in more than 72 markets, according to the release.
"We are very excited to partner with Target, one of the most loved retailers in the country with a reputation for supporting local communities. Partnering with Target and the national scale they provide allows Shipt to further accelerate our growth, bringing our service to more people, in more markets across the country," Bill Smith, Shipt founder and CEO, said in the release.
The acquisition comes on the heels of competitor Walmart buying Parcel in a strategy that will deliver packages to New York consumers within a 23-hour time frame, noted a New York Post report.