Target has agreed to acquire Grand Junction, a transportation technology company, in order to expand the big-box retailer's delivery capabilities. The merger will also help Target accelerate its mission to improve its supply chain.
“Grand Junction’s technology and algorithms will help Target deliver to guests faster and more efficiently,” said Arthur Valdez, executive vice president, chief supply chain and logistics officer, Target. “This acquisition is part of Target’s ongoing efforts to strengthen Target’s supply chain to provide greater speed, reliability and convenience for guests.”
Grand Junction's software platform is used by retailers, distributors and third-party logistics providers to manage local delivery. The company works with more than 700 carriers.
Grand Junction already works with Target on its same-day delivery pilot at Target's store in New York City. After the official merger, Grand Junction employees will become Target employees.
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Rob Howard, founder and CEO of Grand Junction, will now become a vice president of technology at Target. Howard says that the merger offers a tremendous opportunity for Target to leverage local delivery during a time of great push and competition for same-day delivery options.
"Target is transforming its supply chain and logistics capabilities so we can serve guests with more speed and convenience, while creating new offerings and services. Whether guests shop online or in a store, they expect to get products quickly and on their terms. With this acquisition, Target will have immediate access to Grand Junction’s technology and carrier network, which will accelerate the work we’re doing to improve our speed of delivery. It will also boost our ability to offer new services—like same-day delivery, and even assembly and installation—to our guests," Valdez said in a Q&A on Target's corporate blog, A Bullseye View.
Valdez also said that Target's same-day delivery pilot will expand to a few more New York City-area stores this fall and then in 2018, the service will start in other major cities.
Ultimately, will this acquisition help Target secure a spot as one of the leaders in the same-day delivery space?
Greg Portell, lead partner for A.T. Kearney's consumer products and retail practice, says that the acquisition allows Target to avoid the bumps and bruises of learning to implement this technological capability themselves.
"Retail success has become as much about technology as it is about merchandising," Portell told FierceRetail. "By acquiring scalable technology, Target balances their competitive profile. Target’s mobile app and proven ability to mine consumer data make it one of the few retailers with the parts in place to build a competitive position online. The fact that this technology comes with the tangible delivery capability accelerates Target’s move to quickly close some competitive gaps before they grew too large."
Portell also advises that Target embrace the growing pains associated with acquiring a new startup.
"Maintaining the risk tolerance of a startup will be an important part of Target’s growth trajectory," he said. "At some point, all retailers will need to grapple with the integration of physical footprints with digital store fronts. That challenge isn’t unique to Target. As retailers continue to sort themselves into competitive clusters, the playbook for such integrations is becoming better known."