Discount retailer Target to acquire online grocery delivery service Shipt

Retail acquisition news : American discount store retailer Target has struck a deal to acquire online grocery delivery service Shipt for $500 million with an intention to strengthen its fulfillment capabilities.

Shipt, which is headquartered in Birmingham, Alabama, was founded in 2014. It is a membership-based online grocery marketplace and same-day delivery platform.

The online grocery delivery service boasts of a network of more than 20,000 personal shoppers. These Shipt personnel shop on behalf of ordering customers at stores of their choice and deliver the items within hours across more than 72 markets.

Customers order their grocery items using the Shipt grocery delivery service app.

Target CEO Brian Cornell (left) and Shipt CEO and founder Bill Smith. Photo courtesy of Target Brands, Inc.

Target acquisition of Shipt is believed to speed up the digital fulfillment efforts of the discount store retailer of providing same-day delivery services for nearly half of its stores by early 2018 across the United States.

Before the holiday season in 2018, the discount store retailer is targeting to have the same-day delivery services launched at a majority of its stores, and in all key markets.

The products that will be offered by Target at the launch of the same-day delivery are going to be groceries, essential items, home, electronics among other products.  The discount store retailer intends to expand the products for same-day delivery in the future.

By 2019 end, Target aims to have all major product categories to be eligible for same-day delivery to customers.

Commenting on Target acquisition of Shipt, John Mulligan – the executive vice president and chief operating officer for Target, said: “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.”

John Mulligan added that the service-oriented approach of Shipt is in line with the commitment of Target to offer an exceptional shopping experience for customers.

Post acquisition, Shipt will be a wholly owned subsidiary of Target, and will be operated as an independent entity. The online grocery delivery service also intends to grow partnerships with other retailers looking for same-day, last-mile capabilities.

Bill Smith – the founder and CEO of Shipt, commenting on Target acquisition of Shipt, said: “Partnering with Target and the national scale they provide allows Shipt to further accelerate our growth, bringing our service to more people, in more markets across the country.

“We’ll continue growing our marketplace and membership base, working with a variety of retailers to drive scale and efficiencies. We look forward to introducing Target guests to the convenience of our same-day delivery services, with the level of personal attention only Shipt can provide.”

Subject to customary closing conditions, Target acquisition of Shipt is anticipated to be completed by the end of 2017.