Target (TGT) announced same-day delivery on thousands of items, marking the latest move in the same-day delivery war with Walmart (WMT) and Amazon (AMZN). Shoppers in 47 states across the country will now be able to get items from online orders delivered same day by paying a flat fee of $9.99 per order.
TARGET ANNOUNCES SAME-DAY DELIVERY: Target announced in a post to its corporate website that same-day delivery is now available directly through Target.com. Using Shipt, a membership-based, same-day delivery platform it acquired for $550M in 2017, online shoppers in 47 states will now be able to get items delivered same day by paying a flat fee of $9.99 per order without committing to an annual membership.
"Guests can now get 65,000 items delivered to their door in as soon as an hour with an order placed directly on Target.com...Plus, for guests who want to try out Shipt's delivery service, they can sign up for a free four-week trial or have the option to pay a $9.99 delivery fee for each order on Target.com, giving guests the benefits of same-day delivery without having to commit to an annual membership," the post stated.
Target shoppers were previously able to get orders delivered on the same day by being a Shipt member, which costs $99 per year.
WHAT'S NOTABLE: Walmart announced in May that it would step up its battle with Amazon and Target by offering one-day delivery without a shipping fee, weeks after Amazon announced a similar offer. Walmart said that as many as 220,000 items, which range from laundry detergent to toys and electronics, will qualify for one-day shipping. Walmart started offering same-day pickup in its stores in 2011 and caught up with Amazon's two-day free shipping two years ago by offering it without a membership fee. Walmart is on track to offer same-day delivery for groceries out of a network of 1,600 stores by the end of the year, the company recently said, and it announced on June 7 that it plans to offer in-home grocery delivery in three cities later this year.
On April 25, Amazon said it plans to deliver packages to Prime members of in one day and expects to spend $800M toward the shipping goal in the second quarter alone. Amazon currently offers Prime members, who pay a $119 annual fee, free same-day delivery for more than 3M items and for orders over $35.
RECENT ANALYST COMMENTARY: In April, Barclays analyst Matthew McClintock upgraded Target to Overweight, saying Target is taking market share from a "much weaker" retailer subset than other positive traffic retailers, McClintock told investors in a research note. The analyst believes this appears sustainable over the investment horizon.Further, the analyst said Target is already ahead of Amazon in same-day delivery and has built a supply chain that fulfills ecommerce primarily from stores, where next-day delivery is much easier. That same month, Baird analyst Peter Benedict said he believes Target's "growing suite of convenient fulfillment capabilities and improved traction with consumers" seem underappreciated by the market at current share levels.
PRICE ACTION: In morning trading, shares of Target are fractionally higher to $88.51.
Target
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