Target acquiring Shipt for $550 million

Target today announced it is acquiring Birmingham-based online delivery platform Shipt for $550 million in cash, with an ambitious plan to use the firm to transform its capabilities. Target says the deal "significantly accelerates" the company's digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018, and in all major markets by the 2018 holiday season. Target expects to offer same-day delivery of groceries, essentials, home, electronics and other products, and expand the products offered over time. Shipt will be a wholly-owned Target subsidiary, and will continue to run its business independently. Shipt founder Bill Smith said his company is "very excited" to partner with Target, saying its national scale will allow Shipt to further accelerate its growth. "We'll continue growing our marketplace and membership base, working with a variety of retailers to drive scale and efficiencies," Smith said. "We look forward to introducing Target guests to the convenience of our same-day delivery services, with the level of personal attention only Shipt can provide." All current Shipt employees will continue to be employed by Shipt and will work from offices in Birmingham and San Francisco, Target announced. Smith will remain as CEO, reporting to Target COO John Mulligan. "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," Mulligan said. "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." Founded in Birmingham in 2014, Shipt delivers to more than 70 markets using a network of 20,000 shoppers to fulfill orders. Dubbed as an "Uber for groceries," the company earlier this year closed on a $40 million funding round that was projected to allow it to expand to 100 cities by the end of 2018.  Smith, at SlossTech in July, remarked at the time on how the company's growth was changing it.  "Increasingly, we're turning into a marketing company for consumer packaged goods companies," Smith said.  In August, Target made another move aimed at delivery. It acquired Grand Junction, a San Francisco-based transportation technology company, to improve and expand its delivery capabilities and transform its supply chain.