Target to Buy Grocery Delivery Startup Shipt for $550 Million

      Target has decided to purchase a new startup in order to compete with grocery delivery services that have been rolled out recently from competitors like Amazon and Wal-Mart. Target announced this investment into grocery delivery services startup Shipt, will cost the company $550 million, which is part of the company's three-year investment plan to spend $7billion on its "stores, supply chain, and digital improvements" in an effort to boost weak performances in years past. Target aims to provide convenience for customers by adding this service allowing customers to pay an annual subscription fee for the service while also boosting sales by being able to charge a premium on the grocery ordered through the service. In addition, the acquisition by Target allows the company to become more competitive by following the growing trend in grocery stores to offer some sort of delivery or pickup option.

    With Target acquiring Shipt, they are now able to take advantage of a new market opportunity and target market; the online grocery shoppers. This new target market for Target will provide the store with a way to differentiate itself from the multitude of available grocers to consumers. Target will be able to advertise themselves as being ahead of the game with this acquisition and appeal to a younger audience of consumers who are increasingly in favor of shopping online for all their goods. Overall this move with help Target meet its goal of recovering sales from previous years poor performances while also staying competitive in the market.


By:Aaron Mandell

https://www.wsj.com/articles/target-to-buy-grocery-delivery-startup-shipt-for-550-million-1513181845