Target acquires Shipt, will roll out $99/year, same-day delivery

Target to buy grocery delivery service Shipt for $550 million

Getty Images. Target is planning to acquire same-day delivery service platform Shipt a rival to Instacart for $550 million

"It's one of our biggest successes, and we hope to build on that for sure".

Meijer launched its Shipt-based delivery service in Detroit in 2016.

For now, Target shoppers will need to pay Shipt's $99 annual membership fee to gain access to the service.

The all-cash deal will let Target customers order groceries and other goods online, and then have the items sent directly to their doors from nearby Target stores. In particular, Alabama has one of the lowest rates of startup density in the country, at 64.3 startups per 1,000 employer businesses, compared to 90 in California.

And going in the other direction Amazon grabbed a physical store presence via the acquisition of Whole Foods. That's why many of them are seeking help from e-commerce startups like Shipt and Instacart. But that's all dependent upon if the acquiring company plans to maintain the startup's headquarters.

Shipt is an online same-day delivery service.

Founded in 2014, Shipt serves about 20,000 customers through partnerships with retailers including Publix Super Markets Inc., HEB Grocery Co., Kroger and Costco. The company said the deal, expected to close by year-end, won't affect its financial results in the short term, but would spur online growth a bit further out.

"It's win-win for us", said Bill Smith, founder and CEO, Shipt. It'll be available at most of its stores by the 2018 holiday shopping season, it said.

Another major retailer is entering the delivery market. Shipt will not have to just compete with Instacart, but also Amazon. Once a customer orders, they send a "shopper" into the store to grab the groceries, and then deliver the items.

Here's what the partnership means for you: Target will be able to leverage Shipt's proprietary technology and existing community of shoppers to get your order delivered same day, reports WWD. Target said it will launch same-day delivery of groceries, essentials, home, electronics and other products while expanding from there. The customer gets convenience.

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