Target is planning to buy its way to same-day delivery via the acquisition of Shipt for $550 million in cash.
Shipt is an online same-day delivery service.
According to Target, the purchase of Shipt will bolster its digital fulfillment efforts and bring same-day delivery to about half of its stores by early 2018. Shipt's delivery service will be offered to most Target stores in major markets before the 2018 holiday season.
The move highlights how traditional retailers are transforming their back-end operations for delivery services. For instance, Walmart has built out its capabilities and digital efforts via acquisitions. Home Depot last week outlined plans to break down its fulfillment and supply chain silos and invest heavily in digital. Best Buy has made a turn toward omnichannel.
Shipt has largely specialized in grocery delivery, but Target's plan is to expand product offerings. Target said it will launch same-day delivery of groceries, essentials, home, electronics, and other products while expanding from there. By the end of 2019, Target said all its major product categories will have same-day delivery.
There are two sides to the Shipt service. Shipt said its delivery workers can make up to $25 an hours and set their own schedule. Think: Uber but for grocery delivery. The customer gets convenience.