Definitely a two-thumbs up. Target’s broad assortment should ultimately allow it to compete with Prime Now, and owning the last mile is always a good idea.

I don’t know how Amazon will deal with its Instacart contract, but perhaps that’s what the 2019 date is all about.

It turns out it is really more profitable to ship locally and avoid all the packaging associated with air freight.

One thing I have learned in my life is that a.) no market is infinite and b.) other companies rise to the challenge that a disruptor brings. Amazon was the disruptor — Target and Walmart are responding, each in their own way. And Best Buy has re-found its groove as well.

Rumors of a “retail apocalypse” are just overstated. The market shifts. And that’s a beautiful thing.

As we have seen in a number of other sectors, this type of complementary acquisition allows — in this case — Target to be in the professional shipping business almost overnight. It is a win/win situation.

Target’s plan to acquire Shipt signals a clear intent to capture a much larger slice of the online grocery market. This is a sensible and logical move for a number of reasons.
 
First, it gives Target the infrastructure and operational capacity to grow its market share in the online grocery channel. This is currently a segment where Target underperforms — a position that is not sustainable given the increasing popularity of buying food online.
 
Second, bolstering growth in grocery allows Target to improve sales volumes which are necessary to support economies of scale and margins. This has become particularly important because of Target’s focus on low prices.
 
Third, and perhaps most importantly, the new platform will allow Target to offer same-day delivery on a wide selection of non-food items. This makes the grocery service more attractive to consumers, and will also increase the profitability of the Shipt business model.

Great move by Target, two thumbs up on this one! Buying Shipt puts Target well on their way to developing a competitive answer to Amazon Prime and Prime Now loyalty through Target’s REDcard. Coupled with their recent launch of mobile payments via their app, Target has been somewhat quietly positioning themselves very competitively against Amazon and Walmart. While the others have pushed a constant flow of press releases and other announcements, Target is clearly thinking about their customers and how to improve the experience.

Target needed a way to enhance their grocery segment and delivery may be the answer they need. As they add other product categories the convenience factor of shopping with Target will increase tremendously for consumers.

With Shipt, Target is gaining a way to own the last mile, something Amazon’s own logistics have been driving for some time. I’d say this quite convincingly places Target in everyone’s sights as a top retailer in the battle with Amazon.

This takes Target up a notch and brings more convenience to the shopper. Shipt gives the consumer the ability to stay home, but still brings them the Target experience via personal shoppers. This is a win/win for sure. For the rest of the industry, this increases the stakes and makes same-day or 24-hour shipping a minimum standard.

This deal puts Target firmly into the viable “final mile” business. The only question is the extent to which Shipt will continue to operate independently. The Amazon/Whole Foods deal will change the landscape for Instacart. I see the same dynamics happening with Target/Shipt. I think the management at Instacart may see this as a real opportunity to take share from Shipt.

For Target this deal makes the company a genuine player in the same-day delivery game. While the Shipt model uses their own app or web front-end and offers free delivery for orders over $35 while charging slightly different prices from those in stores, my understanding is that Target is offering free delivery with an annual membership fee of $99. It is also not clear if Target guests will go through the Shipt app, through the Target online store or both as more products become available for same-day delivery. What Target gets immediately from this deal is an army of 20,000+ personal shoppers, multi-year experience in the store-to-door delivery space and a whole lot of data about the products purchased and expectations people have for same-day deliveries. Convenience and speed are the keys in today’s retail environment. Across almost any customer segment you find that, outside of the actual experience derived from the products you purchase, time is the key to unlocking the make-or-break relationship a retailer has with its customers. In grocery, a customer can… Read more »

Target’s decision to buy Shipt may amount to putting the delivery cart before the fulfillment horse.

While it’s a bold step, rapid store fulfillment and delivery is not without peril. Will shoppers be willing to pay the tab for this costly form of service? Will in-store fulfillment allow for a high-level of reliability and confidence? Taking an order is easy; delivering on the promise is hard.

I can’t endorse this decision until I feel assured that Target has a firm grasp on store-level inventory optimization — and the ability to port real-time, store-item availability data into the online/mobile ordering interface. Shipt has no particular expertise in this area. It will fall to Target to make the connectivity happen.

Despite these concerns, I like where Target is attempting to go with its acquisition of Shipt. It’s great to see them jump into the competitive fray with other market leaders.