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Target Expedites Same-Day Delivery, Expands to Inland Empire

Zacks Equity Research
Updated
Target Expedites Same-Day Delivery, Expands to Inland Empire
Target's (TGT) launch of same-day delivery of groceries, electronics, toys and other product assortments in Southern California, through Shipt, is likely to generate higher revenues.

Target Corporation TGT is making efforts to ramp up its same-day delivery services. This online retail war was fueled by Amazon’s AMZN buyout of Whole Foods, fusing online and traditional retail. The deal compelled brick-and-mortar grocery retailers to make concerted efforts to shift from physical stores to an online platform. To counter such advances, other leading players in the retail space like Walmart Inc. WMT and The Kroger Co. KR have also been making investments in the same direction.

In this regard, Target made a significant headway in the same-day delivery race by acquiring Internet-based grocery delivery service, Shipt to provide same-day delivery of more than 55,000 groceries, essentials, home, electronics, toys and other products in various markets.

In line with this, the company has plans to launch same-day delivery via Shipt in eight inland Southern California markets. This option will be available from Oct 16, 2018, in areas of Murrieta, Temecula, Palmdale, Lancaster, Palm Springs and Victorville, and from Oct 18 in Riverside and San Bernardino, CA. The launch of this service will help roughly 1.3 million household in Southern California to get products delivered within an hour. The company also intends to launch this service in Los Angeles and San Diego. 

Prior to this, Target has already introduced same-day delivery services in the areas of East Bay, North Bay, Peninsula, San Francisco and San Jose, Salinas, Santa Cruz, San Luis Obispo, and Santa Maria. With aggressive expansion of this service throughout California, the company will enable more than 11 million household across the state to avail this benefit.

Notably, new members who sign up on Shipt, before the launch, will be able to avail a yearly membership for $49 (usually $99). The annual membership will have free, unlimited delivery on orders above $35. We also note that there aren’t any additional membership fees for the service, unlike its leading rival, Amazon.com that requires Prime membership to avail this facility.

Further, the Shipt platform will allow its members to easily search as well as shop in-store products online, following the commencement of the service. Additionally, the platform allows members to note preferences, select a one-hour delivery window and make payments for the purchases done.

Moving on, Target is focused on fast and on-time delivery with the online retail war heating up. The company also acquired a transportation technology company — Grand Junction — to expand its supply chain and improve delivery capabilities. Grand Junction provides a platform that allows retailers, distributors and third-party logistics providers to manage local deliveries through a network of more than 700 carriers. Drive Up, an app-based service, is another initiative by Target to expedite the shopping process. The service allows customers to place orders using the Target app and have them delivered to their cars.

These upsides have helped this Zacks Rank #3 (Hold) stock rally 31.8% year to date, surpassing the industry’s rise of 23.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
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