Target Expands Same-Day Shipping as Delivery Wars Heat Up
Target is bringing its same-day delivery option to the masses — the latest move in an ongoing delivery war involving the big-box retailer, Walmart and Amazon.com. Target announced today that customers in 47 states will now be able to get items delivered same day by paying a flat fee of $9.99 per order. It’s using Shipt, a membership-based, same-day delivery platform it acquired for $550 million in 2017, to do this. Target customers have been able to get orders delivered on the same day by being a Shipt member, which costs $99 per year. That option is still available for everyone, Target said, but the company is making it easier for people to choose same-day delivery on an order-by-order basis vs. signing up for an annual membership. Same-day delivery is currently live on desktop and mobile web browsers for Target shoppers, and the company expects the option should be incorporated into its mobile app before the holidays.
Total Retail's Take: The race to get online orders to customers as quickly as possible continues, with Target the latest retailer to up the ante. The retailer's acquisition of Shipt two years ago foreshadowed its plans to delve further into same-day delivery, and that timeline was likely accelerated by the actions of its two primary competitors, Walmart and Amazon. Walmart is on track to offer same-day delivery for groceries out of a network of 1,600 stores by the end of the year, and has pledged to reach 75 percent of American consumers with faster shipping by the end of 2019. Amazon offers Prime members, who pay a $119 annual fee, free same-day delivery for more than 3 million items and for orders over $35. Nonmembers have this option by paying an additional $9.98 per item. However, as retailers invest significant time and money into beefing up their infrastructures to support this speed of delivery, there's a question that remains to be answered: is it sustainable?
“Target announcing expanded same-day delivery comes as no surprise following Amazon and Walmart doing the same over the course of the past few months," says Erik Morton, senior vice president, product and strategy at CommerceHub, a provider of cloud-based e-commerce fulfillment and marketing solutions. "It's becoming clear to all of these major players in the retail industry that delivery speed and flexibility reigns supreme with consumers. They all have to adjust their strategies to cater to new consumer preferences towards convenience and same-day offerings. We will inevitably start to see more retailers following suit, and the race towards same-day start to evolve to become three-hour delivery, then two hour, then one hour, etc.”