Half of Target’s Stores Will Offer Same-Day Delivery by Early 2018

MINNEAPOLIS — Target Corp.’s purchase of internet-based grocery delivery service Shipt will enable the big box retailer to roll out same-day delivery to approximately half of its stores across the country in the very near future.

Shipt, based in Birmingham, Ala., currently operates in 72 markets. Target, which is buying the company for $550 million, plans to use Shipt’s proprietary technology platform and its 20,000-plus strong community of personal shoppers to bring same-day delivery to consumers who frequent their stores nationwide. 

By early 2018, half of Target’s stores are expected to offer same-day delivery, with plans for the service to hit most of the remaining Target stores ahead of next year’s holiday season. 

Initially, Target’s same-day delivery service will be limited to groceries, essentials, home, electronics and other assorted products. However, the selection will expand over time. By the end of 2019, the Minneapolis-based company plans to offer all of its major product categories through the service.

"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," John Mulligan, executive vice president and chief operating officer, Target, told Convenience Store News' sister publication Progressive Grocer. "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."

By acquiring Shipt as a wholly owned subsidiary, Target is making a clear move to keep up with its competitors, such as Seattle-based Amazon and Bentonville, Ark.-based Walmart. Amazon’s same-day delivery service Prime Now has been steadily expanding to new cities, while Walmart acquired New York City-based same-day delivery startup Parcel and is piloting a program that pays its store associates to make doorstep deliveries of online orders on their way home from work. 

While Target has been a bit behind the curve when it comes to the e-commerce space, the company's third-quarter results have been promising, according to Michelle Grant, head of retailing at research agency Euromonitor International.

"Having an 'instant' delivery option," according to Grant, "whether it's click and collect or hyperlocal, is table stakes now for grocers."

Click here to see read more from Convenience Store News' sister publication Progressive Grocer.