Getting products to the consumer the fastest has been a growing trend among retailers. And as more and more of these consumers are tending toward convenience, there’s no doubt why Amazon.com Inc. (NASDAQ: AMZN) has been top dog in this space for a while. But Target Corp. (NYSE: TGT) is fighting back with its most recent acquisition of Shipt.
Shipt is a leading online same-day delivery platform that works with leading retailers and local stores to deliver groceries via a community of shoppers and a convenient app.
Target is acquiring Shipt for a total of $550 million in cash, and the retail chain plans to leverage its network of stores and Shipt’s proprietary technology platform and community of shoppers to quickly and efficiently bring same-day delivery to guests across the country.
The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018. The service will be offered from the majority of Target stores, and in all major markets, before the 2018 holiday season.
At launch, Target will offer same-day delivery of groceries, essentials, home, electronics and other products, while expanding the products offered over time. By the end of 2019, same-day delivery will include all major product categories at Target.
John Mulligan, executive vice president and chief operating officer for Target, commented:
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, whether it’s ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program. 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. By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt’s service-oriented approach aligns well with Target’s commitment to delivering an exceptional shopping experience for our guests.
Shares of Target were last seen up about 1.6% at $62.01, with a consensus analyst price target of $58.64 and a 52-week trading range of $48.56 to $78.37. So far in 2017, the shares are down about 15%, as well as down over 20% in the past 52 weeks.
Amazon was trading at $1,164.23 a share. The 52-week range is $747.70 to $1,213.41, and the consensus price target is $1,258.16. The shares are up 55% year to date and roughly the same over the past year.