Amazon's Got a Target on Its Back
Another shot fired in battle for reigning same-day delivery king.
On Thursday, December 14, Target announced its acquisition of Shipt, a grocery store delivery start-up that will allow same-day deliveries to half of its stores by early 2018. With this $550 million purchase, Target fires yet another shot in the delivery war aimed at Amazon in hopes of satisfying the seemingly endless consumer need for instant gratification.
The service will launch in early 2018, with same-day delivery of groceries, essentials, home electronics, and other products in half of Target’s 1,834 stores by early 2018. That number will expand to the majority of Target’s stores by the 2018 holiday season, with a full roll-out to all geographies – and major product categories – by the end of 2019. Like Amazon Prime, it will come with an annual fee - $99 per year.
“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.
Target has been moving aggressively to optimize the shopping experience, both online and off, facing stiff competition from both online and offline retailers alike.
[Amazon](https://www.inverse.com/topic/amazon has offered same-day delivery through Amazon Prime since 2005, and now serves 80 million consumers. It announced an expansion of their free same-day and one-day shipping for Prime members from 5,000 locations to 8,000 just a day before the Target announcement. Meanwhile, brick-and-mortar competitor Wal-Mart, has also made inroads into this space, acquiring grocery delivery start-up, Jet, for $3 billion in 2016.
Amazon( an expansion of their free same-day and one-day shipping for Prime members from 5,000 locations to 8,000 just a day before the Target announcement. Meanwhile, brick-and-mortar competitor Wal-Mart, has also made inroads into this space, acquiring grocery delivery start-up Jet for $3 billion in 2016.
PETERBOROUGH, ENGLAND - NOVEMBER 15: A close-up of a packaged Amazon Prime item in the Amazon Fulfilment centre on November 15, 2017 in Peterborough, England. A report in the US has suggested that over half of all online purchases this Christmas will be made with Amazon. (Photo by Leon Neal/Getty Images)
But it is not just retailers that Target is competing against. In early December, it announced a proprietary payment app, Target Wallet that would serve as their own alternative to Google and Apple Pay. Founded in 2014, Shipt delivered online orders within hours to about 20,000 consumers in over 72 markets, through partnerships with grocery stores such as Publix, Kroger, and Costco.
While Amazon has an undoubtable leg-up in the game, with this new acquisition, Target is betting that it can catch up.
