Target Buying Facilitator of Quick Deliveries
Target Corp. is increasingly more aware shoppers want their purchases online to be delivered promptly. To maintain as quick a delivery time as possibly, Target is acquiring a transportation technology company based in San Francisco that facilitates same-day deliveries.
The retailer announced on Monday it agreed to purchase Grand Junction a tech startup whose software is able manage local deliveries by using a network of nearly 700 carriers.
Target supply chain and logistics officer Arthur Valdez said through a prepared statement that the company would leverage the platform of Grand Junction in order to become faster as well as more efficient in the way it deliveries its products to its clients.
Target did not reveal the financial details of this acquisition but did say the deal would be closing soon but no specific date was given.
The 13 employees at Grand Junction will become employees at Target following the closing of the deal, said a Target official. The office of the startup will move from the financial district of San Francisco closer to the Silicon Valley Target headquarters in Sunnyvale.
The CEO and founder of Grand Junction Rob Howard will become the Vice President of Technology for Target.
Target has worked with Grand Junction on a pilot program for same-day deliveries at one of its stores in the Tribeca neighborhood of New York City.
Target announced that same-day deliveries would be expanded to include stores in New York during the fall and to other large cities in 2018.
Target, based in Minneapolis was exploring different ways to lessen the time between customers placing orders and when they actually receive their purchase.
Last June, Target said that a pilot program for the Minneapolis area had been established for delivering essential household items like laundry detergent and pet food in less than one business day.
Target partnered in 2015 with Instacart to establish same-day deliveries of groceries. That came after a pilot program in 2014 offered a Rush Delivery for same-day.
Instacart is still doing Target deliveries in Chicago, Minneapolis and San Francisco as part of the test program.
The desire to have quick deliveries continues to grow. An industry consulting firm said it expects that instant and same-day deliveries to represent between 20% and 25% of the revenue for standard parcels by 2025.
The consulting firm surveyed people in China, Germany and the U.S. and found 25% would be willing to pay more for instant or same-day delivery.