Target acquires same-day shipping with acquisition of Shipt for $550 million

There has always been an ongoing battle between the major retailers such as Target Corp. and Wal-Mart versus online company Amazon. While all three companies are vastly successful, it seems that Target has decided to take Amazon head on by acquiring a new platform for faster, more efficient shopping.

This past Wednesday on December 13, Target announced its acquisition of Shipt. The company is known for online same-day delivery services through its platform. Target bought the company for 550 million dollars in cash, according to a statement released by the company. The retailer will use its network of stores along with the program in order to help its community of shoppers acquire same-day delivery and to increase overall customer satisfaction.

Target acquires new same-day shipping for faster, efficient shopping

“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,” John Mulligan, executive vice president and chief operating officer for Target, stated according to Target.com. “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.” This is one way that Target has been working to bring same-day delivery services to its customers by the beginning of next year. According to a press release from Target, the service will be offered from more Target stores in all major markets before the next holiday season in 2018. The same-day delivery service will include most of Target's merchandize including apparel, groceries, home, electronics, essentials and more. The entire program will fulfill all stores by the end of 2019.

“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,” Bill Smith, Shipt’s founder and CEO, said in a statement. "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."

Due to the acquisition, Shipt will be a wholly owned Target subsidiary and will continue to run its business independently. In the future, Shipt also plans to expand its partnerships with other retailers offering its same-day service. For Target, the transaction is subject to customer closing conditions and will close before the end of calendar year 2017. The acquisition will be immaterial to Target's near-term financial results, while the company is still expected to accelerated in digital and total sales over the medium term.

Photo Source: Target