Target spends $550 million on same-day delivery firm

Target spends $550 million on same-day delivery firm

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

The traditional brick-and-mortar retailer announced a $550 million purchase of Shipt, which it said will bring same-day delivery to about half of its stores by early 2018.

The service will be available from the majority of locations before the 2018 holiday season.

The same-day delivery via Shipt will initially include groceries, essentials, home, electronics and other products from Target.

Target (tgt) is buying tech start-up Shipt in a bid to become a much more serious contender in the same-day delivery wars.

"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, executive vice president and chief operating officer for Target.

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For those not familiar with Shipt, it's a service that employs about 20,000 personal shoppers who deliver groceries to your door when you order them via a proprietary app. Customers pay a $99 annual fee for unlimited deliveries.

Target's move comes as shoppers increasing turn to the internet, where Amazon offers speedy free delivery of many items with subscriptions to its Prime service.

Meijer said Target's acquisition of Shipt will not negatively impact their operations. Our fleet of shoppers pick the items and deliver to our customers' doorsteps within the same day. Shipt will continue to serve the retailers it already works with, some of which compete with Target's grocery business.

What sets us apart, and really one of the big reasons we were drawn to Target, is the value we place on delivering quality, personalized experiences to our customers. We also recently built a rating system that allows customers to give feedback in real-time. Shipt will be a wholly owned Target subsidiary, but its offices will remain in Birmingham, AL, and San Francisco.

Target said Shipt would continue to run its business independently and pursue additional retailers to partner with for delivery.

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