Shipt will launch its same-day delivery service in approximately half of Target stores by 2018.
Under the terms of the agreement, Shipt will serve as a wholly owned Target subsidiary and will continue to run its business independently. Shipt’s chief executive officer, Bill Smith, will remain in his current role and will report to John Mulligan, chief operating officer, Target.
Furthermore, the acquisition will bring same-day delivery services to guests at roughly half of Target stores by early 2018. The service will then be expanded to the majority of Target stores, and in all major markets, before the 2018 holiday season. At launch, Target will offer same-day delivery on groceries, essentials, home, electronics and other products.
By the end of 2019, Target expects to have same-day delivery across all major product categories.
In addition to same-day delivery, Target will also leverage Shipt’s expertise as it aims to strengthen its supply
“We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target, whether it’s ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program. With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country,” says John Mulligan. “By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt’s service-oriented approach aligns well with Target’s commitment to delivering an exceptional shopping experience for our guests.”
The acquisition is subject to customary closing conditions and is expected to close before the end of 2017. The all-cash transaction will be immaterial to Target’s near-term financial results and is expected to be modestly accretive to the company’s earnings per share in 2018.
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