By  on December 13, 2017

Delivery and transportation companies have become hot commodities for retailers such as Wal-Mart and Target Corp., which are looking for ways to combat Amazon’s online dominance.Target raised the ante Wednesday, announcing that it's 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 have been cited by retail industry experts as being not as robust as they could be.Wall Street apparently liked the move, sending Target stock up 2.57 percent to $62.59 on the New York Stock Exchange.“Target’s announcement is positive for the company, and an example of the speed with which Target is attempting to expand and enhance its online channel,” said Moody’s lead retail analyst Charlie O’Shea. “While it won't affect Target’s capability this holiday season, the fact that Target will have this service in place during 2018 will significantly improve its online competitive position since the service is integrated and rolled out to customers. This is yet another example of a bricks-and-mortar retailer leveraging its physical assets to improve its online offerings.”

O'Shea said that many retailers already ship products ordered online from stores. "This will allow Target to deliver products out of stores," he said. "It will reduce inventory levels because you don’t need as much product. The best bricks-and-mortar retailers will have one pile of inventory for both channels.""Same-day delivery will soon be par for the course in the same way that free two-day shipping and buy-online-pick-up-in-store has become standard," said Chuck Grom, a retail analyst at Gordon Haskett Research Advisors. "The team from Minneapolis is no longer sitting back on its heels, but is instead making thoughtful decisions to repurpose assets and improve the customer experience. Strategically, Target is planning to augment the numbers of participants on the Shipt platform over time, creating its own digital ecosystem that's different than the marketplace both Wal-Mart and Amazon successfully created."

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