Target has purchased delivery startup Shipt Inc., a deal which will enable the retailer to complete same-day deliveries from about half of its 1,800 stores by summer 2018, Bloomberg reports.
Customers will pay $99 per year to receive unlimited same-day deliveries, according to the article. Initially, the service will only cover categories like groceries, household essentials and electronics, but Target and Shipt plan to expand the eligible product groups by the end of 2019.
“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,” Target’s chief operating officer John Mulligan says.
This is not the first investment Target has made into strengthening its delivery capabilities this year. Previously, Target acquired Grand Junction, a company whose software streamlines local and same-day deliveries, Bloomberg reports. Target currently only offers same-day deliveries in a few U.S. cities, the article states.
Purchasing Shipt will allow Target to keep pace with same-day deliveries, an option that many consumers have come to expect from online orders. Amazon, Walmart and Best Buy currently offer some level of same-day delivery service, Bloomberg reports. Walmart acquired same-day delivery company Parcel in October 2017.
Shipt will continue to operate independently, according to Bloomberg. The delivery company was founded in 2014 and serves about 20,000 customers in partnership with Publix Super Markets Inc., HEB Grocery Co., Kroger and Costco.