Target announced they have agreed to acquire Grand Junction, a technology company that helps retailers make deliveries faster.
Earlier in the year, Target started to work on a pilot program in New York with Grand Junction that offered same day delivery from a small store location in the Tribeca neighborhood in Manhattan.
The program was a bit different as it was based on in-store checkout and providing customers a delivery service for the items they purchased. Anyone that has spent 5 minutes in Manhattan knows that would be a huge help.
WHY GRAND JUNCTION?
As a tech start-up, Grand Junction focused on building a local delivery platform that would work with existing retailers and distributors. In addition to recruiting over 700 carriers, the company specialized to bring some continuity to local delivery.
The SaaS platform centralized management of local delivery, allowing a retailer to streamline operations, control speed, and real-time visibility.
Local delivery has been a problem for Target. They have run some different trials over the last few years, but none with much success.
Grand Junction with its technology edge is supposed to change that. By integrating the Grand Junction team into the Target’s technology team, the company hopes to put the pieces together for a delivery strategy that works.
“Grand Junction’s technology and algorithms will help Target deliver to guests faster and more efficiently,” Arthur Valdez, Target’s chief supply chain and logistics officer said in a statement. The acquisition will help “strengthen Target’s supply chain to provide greater speed, reliability, and convenience for guests.”
TARGET ALSO BEEFS UP GROCERY
In addition to acquiring Grand Junction, Target announced they had hired two new additions to its grocery team. They are Liz Nordlie, a General Mills veteran who was most recently president of its baking division and Mark Kenny, who was in charge of private labels in deli and bakery at Walmart.
The two new hires are joining longtime Kroger executive Jeff Burt, who took over the Grocery division at Target just in March.
Grocery is also an area that Target is struggling to maintain traction. And that battle goes back many years with activist investor Bill Ackman of Pershing Square pushing for Target to catch up to Walmart on that front.
IS TARGET FINALLY GETTING SERIOUS ABOUT ECOMMERCE?
Same-Day Delivery and Grocery are the new battlegrounds in eCommerce. While Target still needs to fix the core of its business, it also made a recent quiet investment in an eCommerce player.
In June, the company invested $75 million into Casper mattresses, a leading bed in a box eCommerce mattress company. In exchange, Target gained exclusive products from Casper and added Casper displays in its stores.
Also, Casper added to Target’s online offering providing a full range of bedding products. It is the only mattress sold on Target’s eCommerce site.
THE PRESSURE IS BUILDING TO STAY COMPETITIVE
Target has always been a bit of the oddball discount retailer. Its stores are brightly lit, the selection usually of higher quality than you find at Walmart, and its fashion products more in line with current trends.
It could be said that Target provided a great shopping experience for those that just couldn’t stomach walking into a Walmart. The company sold more on selection than price, even so, pricing was mostly competitive to Walmart on similar products.
About five years ago it launched a TV campaign highlighting “color” in shopping along with hashtag #TargetColor. Wait, did eBay just copy Target this year….? You decide!
With in-store sales becoming less important and eCommerce taking a larger role among traditional retailers, Target is addressing most of its shortcomings.
It is not the first time they felt the heat and managed to get through it. Of course, with Amazon and Walmart pumping billions into eCommerce and fast delivery, Target has to catch up quickly. They certainly are behind those two companies.
There is no word on any small business tie-ins yet like a Marketplace. But if Walmart can make theirs work, it can only be a matter of time before Target jumps into that arena. Would they be a suitor for Etsy?
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