Economy

Target Buys Ship't for $550mn. Last Mile Grocery Strategy

Target Buys Ship't for $550mn. Last Mile Grocery Strategy

Third, the new platform will allow Target to offer same day delivery on a wide selection of non-food items, which makes the grocery service more attractive to consumers, and will increase the profitability of the Shipt business model, claimed Saunders.

Target wants to offer same-day delivery service for online purchases. "By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery". Restock is a service that offers customers in certain regions next-day shipping on select products for only $4.99 per box - a price comparable to Amazon's own Prime One-Day shipping.

"It's a big step in the right direction in terms of accelerating Target's ability to deliver products to its customers much more conveniently", Spieckerman said.

Founded in 2014 and located in Birmingham, Alabama, Shipt is a rapidly growing membership-based grocery marketplace and same-day delivery platform.

Founded in 2014 and based in Birmingham, Alabama Shipt is a membership-based grocery service that leverages its personal shopper network in over 72 USA markets to fulfill and deliver orders from local retailers within hours. "With Walmart rolling out grocery pickup at many more stores and looking at same-day delivery, and Amazon making similar moves ..." The idea is to let customers order groceries and other goods online, and then have the items sent directly to their doors from nearby Target stores. "This is yet another example of a brick-and-mortar retailer leveraging its physical assets to improve its online offerings".

Target and other traditional store-based retailers have traditionally had one advantage over online retailers in that they can immediately meet a shopper's needs.

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The battle for same-day grocery delivery supremacy is on!

Though Shipt will be a wholly owned Target subsidiary, it will still operate like a retail partner.

With Shipt, there's a $99 fee for unlimited deliveries of orders of $35 or more. Target is working on how to integrate Shipt into its website and mobile shopping app, Mulligan said.

"With Target's support, we'll be able to reach more customers in more markets across the country", Shipt CEO Bill Smith said.

The transaction is "subject to customary closing conditions" and is expected to close prior to the end 2017.

Pictured: Shipt CEO and founder Bill Smith (center) with Target Chief Operating Officer John Mulligan (left) and CEO Brian Cornell.