Shipt makes largest nationwide expansion in 3 years

Dive Brief:

Amid increasing competition for fast deliveries, Shipt announced what it considered its largest nationwide expansion in three years Thursday. As part of the expansion, Shipt's delivery service will be available at more than 200 additional CVS locations and nearly 50 more GNC locations.
The company said it has added almost 1,000 more store locations to its roster, extending its same-day delivery service to more than two million more households. In addition to CVS and GNC, it also lists expansions through Bed Bath & Beyond and Party City, according to the announcement.
The startup has grown its presence in the Atlanta; Charlotte, North Carolina; Los Angeles; Seattle; Cincinnati and Indianapolis areas, per the announcement.

Dive Insight:

Following Target's acquisition of Shipt in 2017 for $550 million, the company has been strategizing to carve out more share in the same-day delivery market. The pandemic may have helped that, as more retailers began looking for same-day delivery options.

In October 2020, Bed Bath & Beyond enlisted Shipt and Instacart to execute same-day deliveries for its namesake stores and BuyBuy Baby. Last month, Shipt partnered with CaringBridge, a platform that lets people provide updates and seek support for their health problems, to order groceries and other essentials. And earlier this week, Shipt announced it would offer same-day delivery from Cardenas Markets, the Hispanic grocery chain with 59 West Coast stores.

"This is the first time Shipt has expanded this way," said Bridget Fruit, chief operating officer for Shipt, in a statement. "Over the years, Shipt has launched one city at a time or rolled out a new retail partner nationwide, but this exciting coast to coast expansion is unlike anything we've done before."

Since buying Shipt, Target has been enhancing the startup and integrating it into its operations. In 2018, the retailer announced it would expand Shipt's delivery services across all its major product categories, and the following year Target integrated the platform into its mobile app. Earlier this year, Target began testing out a new Shipt delivery service to speed up last-mile deliveries. In August, Shipt debuted a tool to let customers choose their favorite shoppers.

During last year's second quarter, comps for Target's same-day services (Order Pickup, Drive Up and Shipt) saw a 273% spike. That demand appears to have tapered down slightly in 2021, but still rose 55% in the second quarter this year.