Target to Acquire Shipt for $550 Million

Target (NYSE: TGT) announced plans to acquire tech start up, Shipt, in efforts to boost same day delivery option and to better compete with rivals Amazon and Walmart. The retailer is offering $550 million in cash and same day delivery at about half of their 1,800 stores by the summer season. Shipt will be come a Target subsidiary and will continue to work with other retailers such as Costco and Kroger. Founded in 2014, Shipt’s marketplace allows customers to place an order and have it directly delivered to them on the same day, charging $99 a year for unlimited deliveries.

Aside from Target’s acquisition of Shipt, the retailer made efforts to purchase a San Francisco based startup called Grand Junction that connects retailers and other distributors to a network of more than 700 carriers across the U.S. Not only is Target enhancing their delivery service, but Walmart and Amazon has rolled out grocery pickup at many multiple stores as well with same day delivery. Already, Target’s online business has grown 24% in the last quarter and introduced this same day service at their TriBeCa store in Manhattan.

"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," Target Chief Operating Officer John Mulligan said in a statement.

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