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Target Buys Grocery Delivery Service Shipt for $550 Million

Target Buys Grocery Delivery Service Shipt for $550 Million


MINNEAPOLIS, MN
Wednesday, December 13th, 2017

Same-day delivery is in demand more than ever before, according to a survey by fulfilment software maker Temando. And with big names like Amazon and Walmart branching into same-day grocery delivery over the past couple of years, this week Target joined the fray after purchasing grocery delivery startup Shipt for $550 million in cash. Bringing the people what they want, as well as challenging competitors in e-commerce orders, Target hopes its venture into grocery will boost its overall sales, both instore and online.

John Mulligan, Chief Operating Officer, Target“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, Target’s Chief Operating Officer, in a company press release. “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.”

The retailer plans to rollout same-day grocery delivery across the country via Shipt’s platform starting in 2018, with the majority of stores offering the service by next year’s holiday season. Along with same-day grocery delivery, Shipt’s services–which Target customers can activate by becoming a Shipt member and paying a $99 annual fee–also include personal shoppers who stay in touch with customers throughout the grocery delivery process.

Bill Smith, CEO, Shipt“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 Shipt’s CEO Bill Smith in a company press release. “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.”

According to Yahoo! Finance, Target had been working with Instacart to bring grocery delivery to certain markets. However, beginning mid-summer, the retailer began discussions with Shipt, with the acquisition following shortly after. As Target and Shipt move forward, Mulligan stated the company hadn’t reconvened with Instacart about the future yet.

Target Storefront

While the retailer is currently using Shipt’s online platforms for same-day grocery delivery, Target plans to integrate Shipt’s services with Target.com and its own app in the coming months.

With this being one of Target’s biggest acquisitions to-date, will the retailer successfully expand into the realm of grocery? Deli Market News will continue to report on the latest. 

Target
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Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,816 stores and at Target.com. Since 1946, Target has given 5 percent of its profit to communities, which today equals millions of...