Target has a new $550 million weapon to defeat Walmart and Amazon

  • Target is buying Shipt, a platform that enables same-day delivery.
  • The acquisition will allow Target to deliver groceries, furniture, and other products the same day that customers order it.
  • Shipt will continue to work with other retailers for now.

Target has announced it is acquiring the delivery platform Shipt, drastically increasing the retailer's ability to make same-day deliveries across the US.

With a price of $550 million, it's one of the largest acquisitions in Target's history, the retailer said. 

Shipt will supercharge Target's same-day delivery efforts, enabling same-day delivery at half of Target stores by early next year. Target's plan is to have a same-day delivery offering in almost all stores and all major cities across the US by the 2018 holiday season.

For now, same-day delivery will be limited to "groceries, essentials, home, electronics and other products," but it will expand to every product category in 2019. 

RELATED: Check out some savvy ways to save money at Target:

Ways to save money at Target
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Ways to save money at Target

Look at what number price of an item ends in
It may seem overly attentive, but it's worth it. If the price of an item ends in $0.06 or $0.08, the item will be marked down again at some point in the future. If the price ends in $0.04, the item is marked for final clearance and the price will not change again.

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Trade in electronics for gift cards
If you bring your old electronics to the electronics department, they'll quote you on how much your stuff is worth and compensate you in Target gift cards to spend around the store.

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Be aware of the weekly markdown schedule
Different departments in Target mark down items depending on the day of the week:
Monday: Electronics, accessories, kids' clothing, books, baby, and stationery
Tuesday: Domestics, women's clothing, pets, and market 
Wednesday: Men's clothing, health and beauty, lawn and garden

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Thursday: Housewares, lingerie, shoes, toys, sporting goods, decor, and luggage
Friday: Auto, cosmetics, hardware, and jewelry

Strategically utilize holiday clearance sales
Target has consistently scaled markdowns on themed items after the holidays:
Day after holiday: 50% off
Three days after holiday: 75% off
One week after holiday: 90% off

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Sign up for mobile coupon alerts
By signing up, a new set of coupons will be sent to your phone each month (you can even specify the exact time you want them delivered.) The coupons are scannable and can be redeemed at the register. 

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Shop the end caps
The end caps are the shelves that sit at the end of each aisle, seeming somewhat misplaced. However, most clearance items are usually placed here--make it your go-to place to check if you're looking for discounted items.

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Check online for current deals  
Each week, Target updates its current promotions and weekly sales pages--you'll be able to scout out deals you want to take advantage of and know how much you can save before you even get in to store.

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BYOB (bring your own bag)
Target offers a five-cent discount for every reusable bag you bring in to use at checkout. Every cent adds up!

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Opt for store-brand items
A general rule of thumb when shopping at any major retailer, but its especially worthwhile at Target. Target has several top-quality store-brands that produce everything from food to beauty products at a much lower price than name brands. 

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Hit the dollar section first
Target's dollar aisle is like no other--you never know what you can find when you really look! 

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Utilize "Target Cartwheel"
Cartwheel is a social coupon program that Target created that allows you to set up an account to earn and receive deals. You can use each deal up to four times, as well as stack your deals with other coupons. 

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Though Shipt will be a wholly owned Target subsidiary, it will still operate like a retail partner. Its employees will shop at Target stores — not warehouses — for delivery purposes, just like it does it for other retailers.

Shipt requires a $99-a-year membership for unlimited free deliveries. The current minimum for Shipt orders is $35, but Target may remove that for orders from its own stores.

Shipt is currently in 72 cities in the US, but it will expand rapidly with Target's help. 

Same-day delivery is increasingly becoming the battlefield for retailers fighting to be more convenient for customers. Walmart has ramped up its same-day delivery prowess with its acquisition of New York City-based Parcel. Best Buy  also expanded its same-day delivery program, and reduced its cost. Amazon, for its part, offers same-day delivery through its Prime Now program.

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