Retail giant Target announced today that it has acquired same day delivery service Shipt for $550 milliion. It’s a keeping up with the Joneses move for Target as competitors like Amazon, Walmart ramp up the race to get you your groceries fastest.
With the Shipt acquisition, Target says it will start offering same-day delivery to roughly half of its stores by early 2018, and will be offered in all major markets before the 2018 holiday season. The service will start off with groceries, essentials, home and electronics and will expand to include all major product categories by the end of 2019.
As Recode notes, Shipt currently operates in 72 U.S. cities, customers pay $99 a year (just like Amazon Prime!) for unlimited deliveries from a number of grocery chains. Target customers will have to pay for a Shipt membership in order to get their groceries.
The Shipt acquisition follows Target’s August purchase of Grand Junction, which provides technology infrastructure for local deliveries.
Target most likely feels the, ahem, target on their backs as retailers continue to up the stakes for consumer delivery expectations. The competition is fierce:
- Amazon acquired Whole Foods earlier this year, expanding their logistical footprint, and continues to ramp up same day delivery with its PrimeNow service.
- Walmart acquired Parcel earlier this year to facilitate same day delivery in New York, and partnered with August and Deliv for fridge-to-fridge drop off.
- Alberstons signed a deal for Instacart to offer same day delivery in 1,800 of its retail locations.
For retailers like Target et. al., who sell everything, food and recipes and same day delivery will also become a gateway for people to purchase hard goods. This is at the heart of Walmart’s deal with Tasty. Be inspired by a recipe, buy the ingredients and any device you need to make that meal.
Based in Birmingham, Alabama, Shipt has raised roughly $65 milliion in funding and will be run as a wholly owned subsidiary of Target and will continue to sign partnership deals with other retailers.