MINNEAPOLIS—In a deal widely seen as a shrewd move to both capitalize on the advent of e-commerce and drive in-store traffic, Target Corp. is paying $550 million to acquire same-day delivery platform Shipt Inc. The Minneapolis-based retailer expects to offer same-day delivery of groceries and other merchandise at about half its 1,834 stores early next year.
“The retail landscape has been undergoing a fundamental change,” Zacks Investment Management reported Thursday. “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,” says Zacks. At the same time, Zacks says, the deal will help Target compete with Amazon as well as two brick-and-mortar operators that are making major inroads into omnichannel: Walmart and Best Buy.
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