Target increases grocery reach to 42% of US consumers

Target increases grocery reach to 42% of US consumers

Earlier this year, we wrote about Target’s entry into the online grocery market with the acquisition of Shipt.  Recently, Target announced that they have reached their half way point in their drive to become America’s easiest place to shop.  This strategy includes multiple capabilities including Drive Up, Restock (think Amazon Prime Pantry, but free for Red Card holders [$3 for everyone else] and same day), and same day grocery delivery with Shipt.  For this article, we will focus on Shipt.

When we last wrote about Shipt in late March, Target had rolled out same day delivery via Shipt to 33% of US Consumers.  According to our data, in the last 3 months, Target has continued to expand the service to the Midwest, Pacific Northwest, and a few markets in the Mountain West bringing its reach up to 42%.  This moves Target to third place in terms of reach behind Instacart and Walmart.  You can find an updated availability map below.  Target has stated their 2018 reach goal to be 65% of the US households.

target via Shipt 6.18.2018

Shipt as a marketplace

Shipt continues to operate as a market place, offering delivery for retailers beyond Target, and you may be wondering how that’s going.  According to our data, since March, Shipt has added some new retailers, namely Winn Dixie, a more Kroger banners (Fred Meyer, King Soopers, Dillons, Central Market), and several smaller/regional players.  Most telling is that Shipt’s overall reach without Target has continued to grow from 22% of US consumers in March to 34% now, signaling an expansion of stores for existing retailer partners.

Shipt’s ability to grow both its Target offering and that of its other retailer partners is impressive.  Can it continue?  In our previous write up we argued that the competitive nature of Target and most of the Marketplace retailers would drive them away.  This hasn’t (yet) materialized.  If it does, Instacart would be the primary beneficiary along with some technology only solutions that are trying to break through.

What’s next?

We will continue to publish updates as Target pushes to have Shipt available in more than 40 states by the holiday season as well as watch what’s going on with Shipt’s marketplace.  As part of Target’s half way there update, Target also mentioned that in 2019, Shipt’s same day delivery will expand to all major product categories available at Target, not just groceries.  This would be a big move for Target positioning Shipt strongly against Amazon Prime Now.  It will be interesting to see whether Walmart will follow suit.

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