Target, Instacart see value of same-day delivery

Like Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and a handful of other retailers, Target (NYSE:TGT) is realizing the potential value in offering same-day delivery.

Target is testing its Rush Delivery service in Boston, Miami and the Twin Cities metro area, allowing online shoppers the option to have their products delivered between 6 p.m. and 9 p.m. that same day. Rush Delivery costs an extra $10 per order. The orders must be placed by 1:30 p.m., or they will be delivered the next business day.

In order to ensure shoppers' packages are delivered the same day, Rush Delivery orders are filled at Target stores instead of warehouses. Then, Dynamex courier service drops the orders off at shoppers' residences. Target's plan is to eventually leverage all 1,789 of its U.S. stores as distribution centers, enabling the retailer to better compete with online retailers like Amazon and eBay.

Further confirming Americans' demand for same-day delivery, same-day grocery delivery service Instacart is expanding to additional cities. The company, founded in 2012, this week said it raised $44 million to expand into 17 cities by the end of this year.

The grocery delivery service currently operates in San Francisco, San Jose, Los Angeles and seven other U.S. cities. "We've proven out our model in 10 cities across the U.S., and it works," company founder and CEO Apoorva Mehta Mehta said in a statement. "Instacart's customer base in every city is growing by double digits monthly, and we've developed a great playbook for geographic expansions."

Meanwhile, Target is also testing another type of ship-from-store order fulfillment that would speed the retailer's standard shipping options from between four and 10 days to as little as one day.

For more:
-See this Pioneer Press article
-See this Instacart press release
-See this FierceRetail story

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