Target is acquiring the same-day delivery service platform Shipt for $550 million, and will offer their products through the platform by early 2018. It's a sign that they're ready to take on online retailers like Amazon.
Amazon has been around for a while, and their in-store competitors haven't always been as afraid of the online retailer as they should have been — 70 percent of small businesses didn’t “believe that Amazon will impact their holiday sales,” a November survey found a week before nearly half of Black Friday's 5 billion in sales went to Amazon.
Target's Feeling the Pressure
Greg Ng, VP of digital engagement at PointSource, issued a statement on the acquisition, arguing that the investment in a faster shipping service points to Target's renewed effort to improve the customer experience in general.
“Target's acquisition of Shipt represents a realization of the pressures on retailers to increase the digitization of their supply chain so that they can meet the demands of consumers for quick, streamlined deliveries. As we continue to see companies like Amazon and Walmart duke it out for customer approval, Target’s move to incorporate same-day functionality to their arsenal will be essential.”
The Future Is Frictionless
Furthermore, Ng predicts this is just the start: Friction-reducing tactics will spread fast across the entire retail industry.
“Moving forward, I expect to see Target and other retailers continue to roll out similar capabilities across the country and focus on adding features that enhance the user-experience. I expect some of these features to include more frictionless experiences like self mobile checkout and quickening the delivery time from store to home,” he explains.
Target's buy certainly seems to be a clear sign that the ecommerce squeeze has triggered retail giants to explore paths towards recapturing their dwindling userbase. It isn't news that Amazon is eating retail franchises' lunches. Now, they're fighting back.
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