Target agreed on December 13, 2017 to buy Shipt for $550 million in cash, with plans to bring same-day delivery to approximately half its stores by early 2018. For customers, the service would outsource the shopping trip as well as the drive: Shipt’s shoppers select items in nearby stores and deliver them. The deal was still subject to closing conditions, with completion expected before the end of 2017. [S1][S2]

Shipt founder and chief executive Bill Smith described the work in a Q&A published by Target: the person who picks a customer’s order is also the person who delivers it. That puts selection and delivery in one shopper’s hands, unlike simply transporting a sealed parcel. Smith said a rating system made customers more likely to be matched again with shoppers they rated highly. A good rating increased the chance of a repeat match; it was not a promise of the same shopper on every order. [S2]

The company already had more than 20,000 personal shoppers fulfilling orders from various retailers in more than 72 markets, according to the acquisition announcement. Those figures describe Shipt’s existing operation, not places where Target delivery had already launched. Target planned to start with groceries, essentials, home goods, electronics and other products, reaching all major product categories by the end of 2019. Its store rollout aimed for the majority of locations and all major markets before the 2018 holiday season. [S1]

The proposed service came with a $99 annual Shipt membership, according to Target’s accompanying Q&A. Customers were told to check Shipt.com for local availability beginning the following spring. The release set an early-2018 goal for reaching half of stores; the Q&A pointed customers to spring. Neither supplied a launch date for every store. A household still needed to know whether its local Target would be served before treating the membership price as an available offer. [S1][S2]

Target’s formal risk disclosure explains why buying the platform would not finish the rollout. It specifically identified Shipt’s ability to expand its shopper network into new markets within expected cost levels as an uncertainty. The practical constraint is people available to shop and deliver locally, not software or store locations alone. A large national network is useful, but it does not by itself establish reliable service at a particular address—or what expanding that service will cost. [S1][S2]

Source documents

  1. Target to Acquire Same-Day Delivery Platform Shipt, Inc. to Bolster Fulfillment Capabilitieshttps://corporate.target.com/press/release/2017/12/target-to-acquire-same-day-delivery-platform-shipt,-inc-to-bolster-fulfillment-capabilities
  2. Here’s How Acquiring Shipt Will Bring Same-Day Delivery to About Half of Target Stores in Early 2018https://corporate.target.com/news-features/article/2017/12/target-acquires-shipt