Discount retailer Target is gearing up to fend off competition from online giants Amazon (AMZN) and Walmart (WMT) during the coming holiday season. The retailer is working aggressively in expanding the same-day delivery of grocery and other product via Shipt as well as the new programme rolled out this year – Drive Up, the curbside pickup service. Customers across the US Midwest and Southeast can avail the benefits of these services, this week onwards.
Among all the cities, Chicago stands to benefit the most once the services begin there in July. The customers in Chicago can avail all the four services of Target, i.e., Target Restock, Shipt, Drive Up, and from the store delivery.
Based on the new plans, Shipt is likely to expand to over 135 markets. By the holiday season, the retailer plans to roll out this service in over 40 states, targeting nearly 65% of the US households. On the other hand, Drive Up service is available in 20 states with 600 stores. Target aims to touch 1000 stores by the holiday season.
Online grocery is said to be the fastest growing segment among other online segments. More consumers are buying groceries online as major retailers like Target and Kroger are investing into expanding this market. Target had last year acquired the grocery delivery startup Shipt in a deal worth $550 million. Apart from Target, Shipt also has tie-ups with big names that include Kroger (KR) and Costco (COST).
Amazon and Walmart have been a threat to most of the US retailers. In fact, when Amazon acquired Whole Foods in 2017, the discount retailer’s shares fell. By 2021, sales generated from online grocery market is estimated to reach $29.7 billion.