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Target Sharpens Edge, Announces Same-day Delivery Service

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Target Corporation (TGT - Free Report) , which has introduced several innovative endeavors to counter competition, has announced it will begin same-day delivery across Florida in partnership with an online deliver platform, Shipt, Inc. Notably, the company has acquired Shipt, Inc. recently with the objective of capitalizing on the booming online shopping

Shipt will begin the same-day delivery from Target stores in Tampa and South Florida, beginning Feb 1, 2018.  The facility will also be available in Daytona Beach, Fort Myers, Gainesville, Gulf Shores, Jacksonville, Naples, Sarasota, Orlando, Space Coast, St. Augustine, Tallahassee and Treasure Coast form Feb 8, 2018. More than 6.3 million customers across the state can avail this service.

The company will provide same-day delivery services of groceries, essentials, home, electronics as well as other products. However, the company will expand it to all major products by the end of 2019. Moreover, with the help of Shipt, Target will start providing same-day delivery services from nearly half of its stores by early 2018. The services will also be available from most of the stores in major markets by the beginning of 2018 holiday season.

Founder and CEO of Shipt, Bill Smith said “Florida’s growing community of Shipt members continues to be loyal and enthusiastic about the service, and we look forward to expanding throughout the state with our newest retail partner, Target.”

The retail landscape has been undergoing a fundamental change. With digital transformation in shopping and consumers splurging online, store and mall traffic has been hit hard. As a result, most retailers, including big-box, are struggling to compete with e-commerce channels and are being forced to trim store count to focus more on an online model. We believe, the company’s decision to bring same-day delivery services is likely to lure more customers and in turn will drive the top line higher. The acquisition will also aid the company to compete with e-commerce biggie Amazon.com, Inc. (AMZN - Free Report) , Wal-Mart Stores, Inc. (WMT - Free Report) and Best Buy Co., Inc. (BBY - Free Report)

Other Initiatives

Currently, the Zacks Rank #1 (Strong Buy) company has Restock program, which allows customers to restock their shipping box with essential items online and get them delivered at door steps by the next business day for a nominal charge. Further, the company had acquired Grand Junction in order to improve supply chain and expand delivery capabilities. This transportation technology company provides a platform that allows retailers, distributors and third-party logistics providers to manage local deliveries through a network of over 700 carriers.

In October, the company had launched curbside pickup program, at 50 Twin Cities stores. This program gives customers an option to get ordered items without leaving the comfort of their cars. To avail the service the customers need to place orders via the latest version of Target’s app and then select “Drive Up”. Target will inform the customers when the order is ready for delivery. Once the shopper arrives to the chosen parking spot outside the Target store, an employee will bring the order to the vehicle.

The company’s initiatives such as the development of omni-channel capacities, diversification and localization of assortments along with emphasis on flexible format stores bode well for the stock. The shares of Target have outpaced the industry in a month. The stock has advanced 17.9%, outperforming the industry’s growth of 8.6%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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