Retail

Target Raises Delivery Game To Fend Off Amazon/Walmart

Target

Target is now more than halfway through its rollout of same-day delivery, care of Shipt and the launch of Drive Up, its curbside pickup service. The Minnesota-based retailer is now well on track to hit its goals of having these services available at the majority of its store locations by Christmas of 2018.

According to Target, as of this week, Chicago will be the first U.S. city to host all four of the retailer’s expanded delivery and pick-up capabilities: Shipt, Drive Up, Target Restock and the fulfillment of online orders from within stores.

Chicago is “an important and strong market for Target, with 80-plus stores, including a host of small-format stores,” a company spokesman told CNBC about Target’s investments in the area. “It has a dense, urban population to support ‘from-store’ delivery,” he added. “It’s also a highly competitive market.” (Amazon is reportedly slated to open its next cashier-less store, Amazon Go, in Chicago.)

Shipt is the newest addition to the line-up, acquired by Target earlier this year for $550 million. The service enhances grocery delivery by utilizing personal shoppers who communicate with customers as they pick up their items in the store. Those shoppers are also tasked with texting buyers if items are out of stock and alerting them when they are on the way to deliver their goods.

Target Restock is designed to help customers stay stocked up on everyday essentials like soap, toilet paper and dog food. If it sounds a bit familiar, it is because Prime Pantry by Amazon offers a similar service.

The Target reset has caught a lot of scrutiny. While Walmart has made a lot of big and fairly expensive acquisitions (Flipkart, Jet), Target has honed its focus on supply chain, store remodels and bulking up its private-label offerings. The cost of those upgrades failed to thrill investors, and Target saw its share price docked despite a 3.7 percent increase in store traffic.

As Target reports, it is seeing emerging strength with its new offerings.

“With Drive Up, we’re seeing it as popular among parents of small children for ‘fill-in trips’ to pick up items like diapers,” a company spokesman told CNBC.

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