Target launches test of next-day delivery
Target has launched a pilot program aimed to help consumers get their grocery essentials delivered faster.
Target Restock began Tuesday in the Minneapolis area, offering REDcard holders the chance to stock up on household items that will then be delivered to their homes by the next business day -- for a $4.99 flat fee per box.
The company said household essentials ordered online, like laundry detergent and coffee, will be packaged at a nearby store, allowing for delivery the next day.
"Retailers no longer have the luxury of trying to force consumers into channels. Artificial walls segmenting how consumers shop have collapsed with technology and competition," said Greg Portell, lead partner in the retail practice of global strategy and management consultant A.T. Kearney. "For any retailer, it is critical to find the intersection between the products they sell and consumer demand. In the case of Target, they intend to compete on staples. Failure to answer competitive challenges from Walmart, Amazon and others would cede a huge and only growing part of this market. Conversely, Amazon’s entry into brick and mortar is driven by a similar need to meet consumers where they are not a channel defined by retailers."
While Target has signed a deal with online delivery service Instacart to pick up Target groceries and deliver them to customers in some cities, Target intends to compete with rivals Walmart and Amazon for same-day delivery.
Walmart has been working on a few different ways to combine online ordering with its vast network of bricks-and-mortar stores. A program that lets customers order groceries on Walmart.com and then pick them up at the store is now in a handful of markets around the country. The retailer also recently began offering discounts for online orders that were picked up in the store.