Target Buys Shipt Home Delivery Service

With reporting from Progressive Grocer

Target Corp. has taken an aggressive move into home delivery services by reaching a deal to buy third-party service Shipt Inc. for $550 million in cash.

The Minneapolis-based retailer will combine the Birmingham, Alabama-based vendor's proprietary technology platform and community of shoppers with its own national store network to quickly and efficiently bring same-day delivery service to consumers across the U.S.

The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target's 1,830-odd stores by early 2018. Most stores, including all major-market locations, will have the service prior to next year’s holiday season, the company said.

Upon launch, Target will offer same-day delivery of groceries, home goods, electronics and other "essentials," with selection expanding over time. By the end of 2019, same-day delivery will include all major product categories.

“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," said John Mulligan, Target's executive vice president and chief operating officer. 

"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,” Mulligan said.

Shipt will operate as an independent business and continue working with other competing retailers, the companies said. It currently has relationships with other retailers including Meijer, HEB, Publix, Kroger and Costco.

Target had been testing home delivery service through Instacart.