Target, Amazon, and Walmart are all locked in a tight battle for consumer dollars. One of the major competitive milestones? Putting their products in customers’ hands faster, namely through same-day delivery:
- Amazon offers free same-day delivery to Prime customers on orders over $35. Customers without Prime can receive same-day orders for $12.99.
- Walmart offers free same-day Express Delivery to Walmart+ customers on orders over $35. Non-members can receive same-day orders for a fee of $10.
- Target offers free same-day delivery to Shipt members on orders over $35. Non-members pay $9.99.
The three retailers are practically in lockstep when it comes to the details of their same-day shipping program. However, what’s different is the way they’ve gone about it. Amazon has steadily been building its own Amazon Logistics fleet for last-mile delivery. Walmart has done the same, although they just recently announced that they will open their last-mile delivery service to other retailers, who will be able to hire their fleet for their own packages.
Target, however, took a different path, namely by acquiring two companies in 2017:
- Grand Junction, a transportation technology company whose software manages and routes local deliveries.
- Shipt, a same-day delivery platform, which has continued to deliver to other retailers, such as Petco and CVS.
By leveraging their stores as fulfillment centers, as well as greater efficiencies of Shipt’s client base, Target has made same-day delivery profitable, according to the company. After all, consider that a Shipt delivery truck may drop Petco, CVS, and Target orders in the same neighborhood. In that case, the costs for that delivery can be spread amongst all three retailers, rather than falling entirely on Target.
As the race continues, we look forward to seeing which of these three companies chose most wisely when establishing their last-mile delivery fleet.ii