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Target to Launch Same-Day Delivery in Chicago via Shipt

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Same-day delivery is the need of the hour. To meet this, Target Corporation (TGT - Free Report) recently announced plans to launch same-day delivery service in the Chicago metro area starting Jun 7 through Shipt.

This is in line with the company’s efforts to expand in the Midwest states of Illinois, Indiana, Michigan, Missouri, Ohio and Wisconsin for more than 55,000 groceries, essentials, home, electronics, toys and other products.

Target has for long been coming up with new offers to drive customer count. For those signing up for the same-day service prior to the launch, the company has announced an annual membership fee offer of $49 instead of the usual $99. Also, with the annual membership, customers can avail free delivery on orders above $35. Apart from this, customers will be credited $15 on a Target order of at least $100.

 

Target,which shares space with the likes of Costco (COST - Free Report) , is going the extra mile to provide the same-day delivery option to customers. The company also aims to offer same-day delivery of in-store assortmentsin most of its stores by the holiday season. The same-day delivery service is expected to be available to 65% of the households (80 million households) in the United States across 180 markets by end-2018. Management has also announced plans to include all major product categories at Target for same-day-delivery by 2019.

According to Technavio analysts, the same-day delivery market in the United States is set to see a CAGR of 23.2% during the 2018-2022 period.Given the bountiful opportunities in this niche, we expect the company to gain traction in the near term.

Moreover, according to Nielsen and the Food Marketing Institute, although only 23% of consumers in the United States buy groceries online, the percentage is likely to bump up to 70% in the next five to seven years. So it can be assumed that the same-day delivery space will heat up pretty soon and the company clearly is gearing up to make the most of it. A couple of key players in the same-day delivery space are Amazon (AMZN - Free Report)  and Walmart (WMT - Free Report) .

Over the past three months, Target has outperformed its industry. The stock has gained 9.9% against the industry’s gain of 6.9%. This Zacks Rank #3 (Hold) company’s efforts to expand its customer base are boosting investors’ confidence. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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