Target, which acquired e-commerce service Shipt in December, announced it will start same-day delivery on Feb. 1 in 57 Flrodia and Alabama stores, according to a company release. The platform will expand quickly from there — to nearly 50% of the retailer's 1,834 stores by the end of the first quarter, and the remainder of stores by the 2018 holidays.
Target will initially offer same-day delivery for groceries, essentials, home goods and electronics, and will include same-day delivery for all major categories by the end of 2019, according to Reuters.
“Our teams moved at lightning speed to get Target up and running on Shipt’s platform in less than eight weeks,” John Mulligan, Target's chief operating officer, said in a statement.
Just over a month after Target acquired e-commerce service Shipt, the retail giant is moving aggressively to counter grocery and other retail competitors on same-day delivery.
With Amazon’s acquisition of Whole Foods last summer, grocery retailers are looking at how to best defend their positions in the e-commerce world. This is especially a concern for Target, whose grocery fulfillment operations have lagged behind brick-and-mortar competitors like Kroger and Walmart — both of which offer store pickup at more than 1,000 locations and are quickly expanding their services.
In addition, grocers across the country, notably Albertsons and Publix, announced chain-wide rollouts of same-day delivery last year through competing e-commerce service Instacart. For many retailers, store fulfillment through a third-party service has served as a quick and relatively straightforward way to wade into the fast-growing online grocery realm.
Up to this point, the Minneapolis-based retailer’s grocery fulfillment operations have trailed the rest of the industry. Target has gradually expanded its Restock program, which offers next-day delivery on household and grocery essentials, and is seen as a competing service to Amazon Prime Pantry. In October, Target expanded its click-and-collect pilot to around 50 Minneapolis stores, and at a lower Manhattan store in partnership with startup Grand Junction, which Target acquired in August.
But those programs do not have as great an impact as the Shipt acquisition. Target could enjoy advantages over grocery retailers thanks to its variety of food as well as nonfood products. The service could also give its grocery division a much-needed shot in the arm.
Other stores that rely on Shipt for grocery delivery — such as Meijer Publix, Kroger, Harris Teeter and H-E-B —may feel a little seasick about feeding Target's bottom line. It's possible those retailers may eventually turn to other grocery delivery options, like Instacart.
As for Target, the delivery expansion may not put it on par with Amazon's massive footprint and capabilities, but keeping it ahead of competitors in grocery and other retail industries may be enough for now.