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Target Introducing New Same-Day Delivery Service in Twin Cities Starting March 1

After acquiring the quick delivery startup Shipt last December for $550 million, Target is implementing the company's model in its hometown as it prepares to go national with the new service.

Target Introducing New Same-Day Delivery Service in Twin Cities Starting March 1
Less than three months after acquiring the same-day delivery startup Shipt for more than half-a-billion dollars, Minneapolis-based Target said Monday it would soon be launching a same-day delivery service modeled after Shipt’s platform in the Twin Cities.
 
Initially, the service will apply to about 55,000 items and will cater to nearly 1.2 million households throughout the Twin Cities metro area, according to a press release on Globe Newswire. The test run is set to start March 1.
 
After downloading Shipt’s smartphone app, customers will be able to set their location, choose their items (including groceries, home, electronics and other items), choose a one-hour delivery window and pay for the order. Shipt’s team of shoppers will select, bag and deliver the items.
 
Birmingham, Alabama-based Shipt runs on a subscription model with an annual membership fee of $99. However, as part of Target’s Twin Cities rollout, area residents who sign up before March 1 will pay only $49 for the year.
 
The launch will also mark Shipt’s official entry into the Twin Cities. The company did not have operations in the region prior to Target’s acquisition, meaning it will need to ramp up hiring in the area to make the service functional.
 
With a total of 50 Target stores partaking in the new service, according to the Star Tribune, an estimated 4,000 people will be needed to assemble and deliver orders. With an eventual nationwide launch, Shipt is planning to hire more than 100,000 people to tackle the service’s demand.
 
“Same-day delivery was at the top of our list when we were thinking about ways to make shopping at Target even easier,” said John Mulligan, Target’s executive vice president and chief operating officer, in prepared remarks. “Shipt’s personalized, customer-focused approach fits perfectly with our commitment to deliver a convenient, exceptional experience and we’re excited to begin offering same day service in our own backyard of the Twin Cities.”
 
Target is expecting the majority of its stores will offer the service by the 2018 holiday season. By the end of 2019, the big-box retailer is aiming to expand the same-day delivery to include all major product categories at its stores. (The roughly 55,000 products included at launch make up more than half of a typical Target store, the Star Tribune noted.)
 
“Launching same-day delivery in the Twin Cities is a milestone for Shipt, and we are thrilled to show new members how Shipt can make their lives easier by delivering on our promise to offer quality products through the convenience of delivery,” said Bill Smith, founder and CEO of Shipt, in a statement. “Expanding the Shipt community in Target’s hometown will… bring this convenience to new members who already love Target.”
 
Target’s purchase (and now implementation) of Shipt can be tied to a $7 billion makeover initiative it announced in early 2017. Target CEO Brian Cornell outlined the company’s massive plan, which entails significant investments in its small-format concept locations; adding more than a dozen new brands; improving its digital presence; and spending the next three years re-formatting the backrooms of about one-third of its locations to not just hold products, but also operate as “hyperlocal distribution centers.”
 
At the time of the announcement, Target admitted it needed to revamp its operations in response to declining profits, among other disconcerting data, in order to remain competitive with Walmart and Amazon.
 
With the latter purpose in mind, the Twin Cities Shipt introduction comes just a week after Amazon made a move with its own same-day delivery service. The service, Prime Now, has existed in most major municipalities, including Minneapolis. Last week, it expanded its delivery offerings (in certain areas) to include fresh produce, meat, seafood and everyday staples from Whole Foods, which Amazon acquired last year.
 
Notably, Target’s reorganization plan has also led to cuts in certain areas of operations. The most recent example of this came late last month when Target decided to pull the plug on a large e-commerce distribution center in Memphis. Nearly 500 workers employed at the facility were laid off in the process.
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