As the retail wars intensify, traditional industry leaders have scrambled to evolve to meet changing consumer demands and the rising global dominance of e-commerce and cloud computing behemoth Amazon.com Inc. (AMZN). In efforts to revive sales and gain market share, retailers such as Walmart Inc. (WMT), Best Buy Co. Inc. (BBY) and now Target Corp. (TGT) have doubled down on their delivery offerings, competing against Amazon's fast, free shipping for Prime members and its newly launched Shipping With Amazon (SWA) program. (See also: Would 'Shipping with Amazon' Kill UPS and FedEx?)
Target, the second-largest discount store retailer in the U.S. behind Walmart, rolled out its new same-day delivery service in home-town Minneapolis on Thursday, with plans to expand the offering in the upcoming days to New Orleans and Baton Rouge. By the end of 2018, the company plans to have same-day delivery available across the nation.
Flat Fee, Unlimited Deliveries
Customers pay $99 annually for unlimited deliveries on orders over $35, and $7 per order on anything under that mark. At launch, about 55,000 products are eligible for delivery, including electronics, toys and perishable groceries. In the near future, the company will offer apparel in the mix as it doubles down on its fashion focus. All major product categories will be available for the service by the end of 2019, according to the retailer.
As traditional retailers expand their online offerings, making ordering more convenient for consumers who are less and less likely to enter a brick-and-mortar location is a huge and necessary step. Shipt, which Target bought in 2017 for $550 million, will hire 5,000 employees locally to pick up and distribute orders. Consumers will select delivery time periods and must be present to accept the shipments.
Shipt, which offers same-day delivery for retailers including Kroger Co. (KR) and Costco Wholesale Corp. (COST), will continue to serve retailers other than Target, according to Fortune. (See also: Home Decor Wars: Walmart Takes on Target.)