Target Finally Has A Response To Amazon’s Speed Delivery Feature

Target store
A target store advertises for workers near its entrance in Encinitas, California, U.S., May 24, 2019. (Photo: REUTERS/ Mike Blake)

Target has decided to step up its game in deliveries with a new same-day delivery feature on Shipt in what some analysts refer to as a challenge to its behemoth retail rival, Amazon.

The company's corporate site revealed that shoppers can get as many as 65,000 items delivered in less than an hour - a service similar to what Amazon offers to its millions of online customers.

The new service that allows for a four-week trial at no cost and comes at an annual fee of $99 has taken the attention of online shoppers and analysts worldwide. Some are optimistic of the changes while others are unsure if Target can compete equally at the level that Amazon delivers.

Some e-commerce experts believe that Target's latest move will play well into the competition regarding fastest deliveries as it could prompt other online shopping websites to step up their game too.

On the other hand, some analysts noted that Target is not as big in the online shopping realm as Amazon is. The company a jump in sales last year but the digital sales figures only stood at seven percent of the U.S. retail giant's $23 billion in revenue.

When it comes to digital sales, Amazon is still the bigger bull, analysts argued. The firm said it allows for up to 10 million items in one-day deliveries at no cost. The e-commerce behemoth also has Prime Now members who subscribe to its $119 annual two-hour delivery service in chosen metros.

Probably another headache that Target has to cure is Walmart. Compared to Target's new feature and Amazon's Prime Now service, Walmart offers no cost, no fees, one-day deliveries for orders over $35.

It is too early to predict whether Target can overcome its two mega-rivals in the speed delivery battle but many spectators would like to see how both Walmart and Amazon will respond to their rival's new service.

When it released Q1 2019 results late last month, Target shares soared almost 10 percent as the company beat analyst expectations with revenues hitting $17.63 billion compared to $17.52 in expectations.

The results indicated that Target hauled in sales largely from the baby and toys departments. Furthermore, Easter and Valentines' Day sales helped bolster overall gains for the first quarter.

Analysts noted that growth in various departments was partly driven by Target's cost-cutting decisions and investments in customer-centric activities and promotions. The latest speed delivery offering is expected to further establish the retail giant as one of the leading e-commerce firms in the United States.

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