Battling Wal-Mart and Amazon’s superior fulfillment machines, Target Corp. today said it has agreed to acquire Shipt, an online same-day delivery platform for $550 million in cash. The acquisition will help Target leverage its network of stores as well as Shipt’s proprietary technology platform and community of shoppers, allowing the retailer to quickly and efficiently bring same day delivery to customers.
Shipt, a fast-growing membership-based grocery marketplace and same-day delivery platform, leverages a network of over 20,000 personal shoppers to fulfill orders from various retailers and deliver within hours in more than 72 markets.
Target said the acquisition will significantly accelerate its digital fulfillment efforts, which are not as robust as they could be, according to retail industry experts.
While Shipt has expertise in groceries, Target plans to use it to deliver much more.
Shipt will allow Target to offer same-day delivery to consumers at about half of its stores by early 2018. The service will be available at the majority of Target stores, and in all major markets, before the 2018 holiday season, with same-day delivery available for groceries, essentials, home, electronics and other products. Target said it will expand the offering over time. By the end of 2019, same-day delivery will include all of the retailer’s major product categories.
“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,” said John Mulligan, executive vice president and chief operating officer for Target, citing ordering online and picking up in a store, driving up to pick up an order, or using the retailer’s Restock program. “With Shipt’s network of local shoppers and its current market penetration, we’ll move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country.”
Shipt isn’t Target’s first acquisition in the delivery arena. The retailer in August agreed to acquire Grand Junction, a three-year-old transportation technology company to improve and expand its delivery capabilities and accelerate ongoing efforts to transform its supply chain.
Grand Junction has been working with Target on its same-day delivery pilot at the Target store in TriBeCa in Manhattan.
Wal-Mart bought its own delivery vehicle, Parcel, in October. The technology-based, same-day, last-mile delivery program specializes in e-commerce package delivery, including taking fresh, frozen and perishable food.
Parcel, which specializes in perishable and non-perishable delivery to customers in New York, also provides services such as scheduled evening delivery and custom text message notifications.
Wal-Mart-owned Jet.com has been testing free same-day delivery of certain orders to customers in New York and said it plans to leverage Parcel for last-mile delivery to customers in New York, including same-day delivery for both general merchandise as well as fresh and frozen groceries from Wal-Mart and Jet.