Credit: Shutterstock photoTarget ( TGT ) announced Wednesday that it would buy an online delivery company, and Amazon ( AMZN ) said it would expand its same-day delivery services as shoppers want online purchases delivered faster.
[ibd-display-video id=2101053 width=50 float=left autostart=true] Target agreed to buy Shipt, an online same-day-delivery platform, for $550 million in cash. The acquisition will expand its same-day delivery services to shoppers at half of Target stores by early 2018, with plans to roll out the service to all major markets before the 2018 holiday season.
At launch, Target expects to offer same-day delivery of groceries, essentials, electronics and home goods. The service works by using Shipt's 20,000 personal shoppers who pick up products and then deliver them to customers within hours.
"With Shipt's network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country," Target Chief Operating Officer John Mulligan said in a release.
Target shares were up 2.7% at 62.67 on the stock market today . Rival Wal-Mart ( WMT ), which reached a deal in October to buy same-day-delivery startup Parcel, added 1.1%. Amazon dipped 0.1%.
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Not to be outdone, Amazon ( AMZN ) said it has expanded same-day delivery and free shipping to Prime members in more than 8,000 cities and towns, up from 5,000.
Holiday shoppers can order something as late as 9:30 a.m. local time on Dec. 24 and still get same-day delivery, while the last day for next-day holiday shipping is Dec. 23.
"We are continually investing in Prime, adding more selection and making delivery faster and more convenient," said Greg Greeley, vice president of Amazon Prime, in a statement.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
