Target to buy Shipt, promises same-day delivery by end of 2019

Target to buy Shipt, promises same-day delivery by end of 2019

Target to buy Shipt, promises same-day delivery by end of 2019

It charges a $99 membership fee and its shoppers buys products from local stores, including grocers like Kroger Co. and Costco Wholesale Corp.

Holiday shoppers can order something as late as 9:30 a.m. local time on December 24 and still get same-day delivery, while the last day for next-day holiday shipping is December 23.

Shipt is now in 72 cities in the United States, but it will expand rapidly with Target's help.

For now, same-day delivery will be limited to "groceries, essentials, home, electronics and other products", but it will expand to every product category in 2019.

Shipt is an online same-day delivery service. Amazon already makes up more than half of online food orders through its Fresh, Prime and Prime Now services.

The acquisition significantly accelerates Target's digital fulfillment efforts, bringing same-day delivery services to approximately half of Target stores by early 2018, the company said. As a result, it plans to offer same-day delivery at about half of its 1,800 stores by summer ahead of a roll-out to almost the entirely fleet by next year's Christmas season.

"We believe that if you deliver groceries, you can deliver anything", Smith said.

Founded in 2014 and located in Birmingham, Alabama, Shipt says it has more than 20,000 personal shoppers to fulfill orders from various retailers and deliver within hours in more than 72 markets. The startup, which has about 275 employees, has raised more than $60 million in venture capital, from backers including Greycroft Partners and Harbert Venture Partners.

Shipt has largely specialized in grocery delivery, but Target's plan is to expand product offerings. "They have built their business model based on the customer experience through the entirety of the purchase pipeline".

The all-cash deal is expected to close before the end of the year.

Target said Shipt will operate as a subsidiary and seek to maintain its partnerships with other chains, but it won't utilize the customer data of other retailers on the platform.

The two companies began discussing the deal in the middle of the summer, Mulligan said. The company outsourced almost all of its online operations to Amazon in 2001 before ending the relationship in 2011.

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