It looks like Amazon might have some competition when it comes to same-day delivery services. Target has just announced its decision to acquire popular same-day delivery service Shipt for a whopping $550 million in cash.
This deal is expected to close “prior to the end of calendar year 2017” and will reportedly help to bring same-day delivery to roughly half of Target’s locations throughout the US by early 2018. Despite being wholly owned by Target, Shipt will continue to “run its business independently” and will not share any information regarding its other business partners — such as H.E.B., Costco and Whole Foods — with the retail giant.
Though this news may come as a surprise to some, Target had already laid out plans to improve their customers’ shopping experience earlier this year. “We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target,” said COO and Vice President John Mulligan. “By the 2018 Holiday season, we will be servicing every major market across the country with same-day delivery.”
The company has already partially delivered on their commitment to making shopping more convenient for customers with the launch of the Restock program earlier this year. Restock is a service that offers customers in certain regions next-day shipping on select products for only $4.99 per box – a price comparable to Amazon’s own Prime One-Day shipping.
Although Target’s purchase of Shipt will undoubtedly be good news for both companies, it does raise questions regarding potential conflicts between Shipt and Target’s other major grocery delivery partner, Instacart.