As grocery stores scramble to figure out online delivery strategies, Target is placing a $550 million bet on Shipt, according to Bloomberg. The Birmingham, Alabama, startup provides same-day delivery of groceries using an on-demand workforce.
Earlier this year, when Amazon bought natural grocer Whole Foods, grocery retailers made pre-emptive moves to set up competitive delivery services, inking deals with companies like Shipt and Instacart. The reason Target is buying Shipt now is likely twofold. The company will be able to control the service aspect, giving it greater control over customer experience. It will also gain access to a trove of data and analytical tools that could improve operations as it more deeply integrates delivery into its ecosystem. In August, Target scooped up Grand Junction, a software company it was working with to manage day-of deliveries and longer-term shipments.