Economy

Target ups ante in online delivery wars

Target ups ante in online delivery wars”

Retailer Target, the red-themed competitor to Walmart, has introduced a new same-day delivery option for many United States customers across the nation.

Delivery is enabled by the Shipt same-day delivery platform, which Target acquired in 2017.

Those with a Target-branded credit card can get the 5% discount and also have the option of paying a single delivery fee rather than a monthly or annual membership.

In the latest salvo in the delivery wars, Target is offering same-day delivery on thousands of items for $9.99 per order through a delivery startup it purchased almost two years ago. Most recently, Walmart announced a new in-home delivery test whereby it will deliver groceries directly inside shoppers' homes. In a presentation provided to Business Insider, Target said that one out of five of its same-day orders were placed by customers who'd never put in a digital Target order before. This includes free curbside pickup at 1,400 stores and free in-store pickup at all 1,850 U.S. Target stores.

Time was, Amazon led the way in pushing the e-commerce industry towards a consumer expectation that delivery should be free.

The financial benefit of all this for Target is that when customers pick items up in stores, it is 90% cheaper for the retailer than when it has to ship something from a warehouse, the company said.

The same-day deliveries take place in as few as 60 minutes, according to the company.

In testing same-day delivery with a $9.99 fee in nine markets ahead of Thursday's announcement, Target said basket sizes grew about 10% to 15% on Target.com, compared with when shoppers were having to go through Shipt's website to get same-day delivery.

Target's move into same-day shipping is a smart one especially since its biggest competitors have also made advances in the space. "At the macro level, it's not sustainable". "The Minneapolis-based retailer is instead focusing on its stable of pick-up and delivery options, including free order pick-up and drive-up services and free two-day shipping and restocking for customers with a REDcard". The online shopping giant announced in April it was offering one-day shipping on a number of products and will continue to add millions of items.



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