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Target announced that same-day delivery of 65,000 items powered by its subsidiary Shipt will now be available directly through Target.com. It’ll also be available to shoppers without a Shipt membership for a flat fee of $9.99 per order, widening its availability.
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The retailer is also simplifying same-day delivery by giving eligible items their own dedicated shopping page, allowing shoppers to edit or add to their orders up to 1 hour before delivery, and enabling customers to save several addresses for faster ordering.
Here’s what it means: Target is increasingly relying on its same-day fulfillment methods.
- The retailer derived a lot of value from its same-day delivery, curbside pickup, and in-store pickup options last quarter. Target said that the three same-day methods drove over half of the impressive 42% e-commerce growth it enjoyed in Q1 and that they were also responsible for a fourth of the same-store sales growth it saw that quarter, according to CNBC. This demonstrates a solid consumer affinity for these fast services, which suggests that making them even more widely available could be a popular move among shoppers.
- Making Shipt delivery more available may drive subscriptions to the service going forward. Previously, to access same-day delivery through Shipt, customers had to pay for a Shipt membership, which costs $99 per year. Now, any Target customer can experience the speed of Shipt without having to fully invest in a membership. If consumers give it a try and enjoy the customer experience, they may sign on for a full membership — which would also give them the benefit of same-day delivery from Shipt’s other partners like CVS, H-E-B, and Meijer.
The bigger picture: Target’s same-day push represents a move to stay competitive as e-commerce giants compete on delivery speed.
Target may be looking to distinguish itself from competitors by focusing on same-day delivery as rivals work toward one-day. The newest phase of the fight to shorten delivery times was kicked off by Amazon’s announcement that it’s working to evolve its core Prime Two-Day Shipping service into a free One-Day Shipping program.
Walmart answered by debuting its own one-day shipping program, but Target seems to be going a different direction by drawing out its same-day offerings. It’s possible that this strategy makes the most sense for Target — though not for its larger competitors — because its smaller selection makes it more feasible to handle delivery and pickup of a significant portion of its overall inventory from stores, shortening its distance from customers and cutting delivery times.
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