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Target to Acquire Same-Day Delivery Platform Shipt

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Target logoBy the 2018 holiday season, Target will offer same-day delivery in every major market across the country, it said on Wednesday when it announced its plans to acquire Shipt, which works with leading retailers and local stores to deliver groceries. By the end of 2019, same-day delivery will include all major product categories at Target.

Shipt will become a wholly owned Target subsidiary, but according to its CEO and founder Bill Smith, it will continue to grow its marketplace approach with new and existing partners, “a strategy that drives scale and efficiencies for all.”

Running independently means the Shipt service will not be free for Target shoppers. Beginning next spring, customers can visit Shipt.com to see if it’s available in their area. If it is, the $99 annual membership fee gets them same-day delivery services from their local Target store for the year.

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This year Target also acquired Grand Junction, a technology transportation company allowing retailers to offer local delivery through its technology and network of more than 700 carriers.

Target is paying $550 million for Shipt.

Press release follows:

Target Corp. today announced it has agreed to acquire Shipt, Inc., a leading online same-day delivery platform, for $550 million in cash. Target will leverage its network of stores and Shipt’s proprietary technology platform and community of shoppers to quickly and efficiently bring same-day delivery to guests across the country. The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018. The service will be offered from the majority of Target stores, and in all major markets, before the 2018 holiday season.

At launch, Target will offer same-day delivery of groceries, essentials, home, electronics and other products, while expanding the products offered over time. By the end of 2019, same-day delivery will include all major product categories at Target.

“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,” said John Mulligan, executive vice president and chief operating officer for Target. “By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt’s service-oriented approach aligns well with Target’s commitment to delivering an exceptional shopping experience for our guests.”

Founded in 2014 and located in Birmingham, Alabama, Shipt is a rapidly growing membership-based grocery marketplace and same-day delivery platform. The service leverages an extensive network of over 20,000 personal shoppers to fulfill orders from various retailers and deliver within hours in more than 72 markets. Shipt values a personalized, customer-first delivery experience that simplifies life and saves time for members. Through Shipt’s app, members are connected to local, reliable shoppers who help facilitate a quality delivery experience that is personalized, efficient and convenient.

“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,” said Bill Smith, Shipt’s founder and CEO. “We’ll continue growing our marketplace and membership base, working with a variety of retailers to drive scale and efficiencies. 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.”

Shipt will be a wholly owned Target subsidiary, and will continue to run its business independently. It also plans to expand partnerships with other retailers seeking same-day, last-mile capabilities. All current Shipt employees will continue to be employed by Shipt and will work from their current offices in Birmingham and San Francisco. Chief Executive Officer Bill Smith will remain in his current role, and will report to Target Chief Operating Officer, John Mulligan. In addition to same-day delivery capabilities, Target will also leverage Shipt’s expertise as the company enhances and strengthens its supply chain, including integration with the recently acquired transportation technology company, Grand Junction.

The transaction is subject to customary closing conditions and is expected to close prior to the end of calendar year 2017. This all-cash acquisition will be immaterial to Target’s near-term financial results. It is expected to be modestly accretive to the company’s earnings per share in 2018, while accelerating digital and total sales growth over the medium term.

SOURCE: Target Press Release

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Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Author of Turn eBay Data into Dollars (McGraw-Hill 2006). Send news tips to ina@ecommercebytes.com.

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