9 ms·
Target to Buy Shipt for $550M
- hypermatt 9y agoquite a big purchase for target, have they bought any other startups in the space?
- vm 9y agoAllegedly it tried to buy Casper for $1B but the company declined to sell and had Target invest instead https://www.recode.net/2017/5/19/15659562/target-casper-investment-acquisition-talks-foam-mattress https://www.recode.net/2017/5/19/15659562/target-casper-inve...
- MrMember 9y agoI go to Target like three times a week on average. $99 a year for same day delivery is totally worth it for me.
- exclusiv 9y agoI just tried the pickup in store option and it was really convenient although since it was my first time I didn't know there was convenient parking on that side. I also bought some stuff there and then went to get my online pickup and tried to go back to my car through the store - the cart's wheels locked up because it thought I went to the parking lot. I had to move all my stuff to a new cart. Store pickup is still nice but $99/yr for delivery is even nicer.
- theklub 9y agoThis reminded me of E-Dreams... https://en.wikipedia.org/wiki/E-Dreams https://en.wikipedia.org/wiki/E-Dreams
- filmgirlcw 9y agoI was actually just thinking, “WebVan and Kozmo were just ahead of their time” — now both businesses had major issues even aside from the .com bust (I haven’t seen E-Dreams in at least 10 years but I recall it glossing over many of the whys behind the company’s failing, probably because when the director started working on it, it was a different story. Startup.com did a better job pivoting in that respect), but the ideas of nearly 20 years ago are now finally ready, thanks to improved logistics, customer mindset, and infrastructure changes. Speaking of Kozmo, I was in high school when Kozmo was briefly in Atlanta, and I knew it couldn’t last. I would have DVDs and candy delivered to class for almost nothing.
- stocktech 9y agoThis feels like Target grasping for straws. They're watching Walmart/Jet.com and asking themselves how to compete. I'd be amazing if they don't fuck this up.
- darethas 9y agoTarget is portrayed in the book "Naked Statistics" as having some pretty advanced data collection and modeling techniques -- they could figure out which of their shoppers were pregnant and adjust their weekly ads sent to those particular households depending on that information. This was in fact too good because the pregnant woman ended up being a teenager, and had an angry father calling demanding to speak to a manager. What any of this means to me is if they have capabilities like that I am sure they made an informed decision based on where they see the market heading and decided this would be a purchase that would increase the bottom line, not grasping for straws as you say.
- justinhj 9y agoIf you lived in Canada or followed their operation here you’d probably take a different view
- astura 9y agoI thought Target pulled out of the Canadian market?
- bearcobra 9y agoThey did. It was a major failure, costing them billions of dollars. Definitely makes you question their decision making abilities
- notatoad 9y agoI think that was the parent's point. Target spent a whole bunch to enter Canada and it was an abject failure for, in retrospect, some pretty obvious reasons. If they were so good at data-driven decision making, they wouldn't have failed so badly.
- harrisreynolds 9y agoThis is awesome news for the team at Shipt!! It should be good for Target too. For them it is all about the technology and the entry point with lots of customers. And ultimately about giving them a way to better compete with Amazon and Walmart.
- jonknee 9y agoShipt is a Birmingham based company, quite the positive news day for Alabama!
- superquest 9y agoGreat to see companies not founded in megacities getting big exits like this.
- superquest 9y agoAnd I hope founders plow some of this money into local venture.
- joering2 9y agoIndeed good news cannot stop coming in for Alabama! Congratulations to everyone involved in this deal!
- esturk 9y agoIf Amazon move its 2nd HQ to Alabama, how would it impact Shipt?
- Dirlewanger 9y agoI don't know about Shipt, but their moving there would start moving the marks on a lot of quality-of-life measurements and perhaps lift it out of dead last for nearly everything.
- chimmy_chonga 9y agoHey now, we usually beat Mississippi
- pfranz 9y agoFor those who don't know https://en.wikipedia.org/wiki/Thank_God_for_Mississippi https://en.wikipedia.org/wiki/Thank_God_for_Mississippi
- LeifCarrotson 9y agoI disagree that this is awesome news for the team at Shipt. The best exit is not always a buy-out; they seem to have been doing great as an independent company. Now they're tied to Target. I'm mostly worried about what will happen to their existing stores: > Our shoppers fulfill orders from your favorite local stores in the cities we serve! It varies by market, but we currently shop at your favorite local stores: ● ABC Fine Wine and Spirits ● Central Market ● Fry’s ● Harris Teeter ● H-E-B ● Kroger ● Meijer ● Publix ● Western > More stores will be offered as we grow! [1] Given that, I don't see a good reason for Target to have bought Shipt. Why not just sign up with them like these other retailers? Unless they plan to cut these partnerships. I certainly hope that they follow through on their claim from the article that "It will continue to operate independently and plans to expand its business with other retailers" and not have Target attempt to cut these partnerships. [1]: http://help.shipt.com/how-shipt-works/what-stores-are-supported-through-shipt http://help.shipt.com/how-shipt-works/what-stores-are-suppor...
- khc 9y agoThey have 20000 customers so that's $2M of membership revenue. There maybe other delivery revenues but surely that can't be more than a small multiple of that. How does 500M price tag make sense?
- jdc0589 9y agotheir pricing model is a subscription + an upcharge on purchased goods (10%?). The upcharge may not do much more than pay shoppers and cover some of those associated costs, I don't know, but there's more than just the base subscription revenue.
- ovrdrv3 9y agoMy guess is infrastructure
- ktta 9y agoHalf a billion worth of infrastructure?
- sedtrader 9y agoSmart decision by Target. Certainly a necessary move to simply keep pace with walmart, bestbuy, Amazon, etc. Doesn't really provide a clear edge, but allows Target to stay competitive in the market for the near future. Interesting decision by Shipt, a little surprised they couldn't get at least 1 billion for the purchase considering how big the e-commerce market is and its expected long term growth.
- QML 9y agoDo stores really have to be physical anymore? I think that’s what is holding Target back.
- ourmandave 9y agoLately I've heard a lot of radio spots pushing Target's free shipping and pick-it-up at your local store. Which is competing / catching up with WalMart.
- tdb7893 9y agoI've had a lot of issues with Amazon recently so I'm happy that these retailers are doing more e-commerce
- WaxProlix 9y agoAgreed. I've been considering dropping Prime, since something like 8 out of 8 deliveries didn't arrive within the 2 business days promised - often with delays of up to a week. Customer service would waste an hour of my time each time I called to ask and verify just so I could know whether I needed to go to a brick and mortar store to buy the item in time. Really, really unpleasant.
- mh- 9y agoI've been experiencing this as well- seemingly with increasing frequency as they use their own "AMZL" delivery service. It's rapidly discouraging me from ordering things from Amazon if I'm going to rely on the delivery date. Or casually ordering things (i.e. via Alexa) that I might not be paying attention to the delivery of. I've had prime since it became available, and this is a very disappointing turn for Amazon from my point of view.
- astura 9y ago>Customer service would waste an hour of my time each time I called to ask and verify just so I could know whether I needed to go to a brick and mortar store to buy the item Amazon customer service is just the worse. They seem to only know how to press two buttons: "refund order" or "ship item." Or maybe "cancel order" and "return" too. If you need something that doesn't get solved by one of those buttons you're going to have a really, really frustrating experience. Every person I ever talked to has a fundamental lack of understanding of the English language, way worse than your typical Indian call center. You ask a question and they just don't understand what you're asking, they get confused, and tell you some irrelevant information. It's a frustrating, time consuming, back and forth to ask a simple question and sometimes you don't even get an answer and your issue is literally never addressed. It just astounds me that it's that bad. But because they reflexively just press "refund order" most of the time the average person thinks they are getting good customer service... In contrast, Walmart's free two day delivery has been on point.
- seattle_spring 9y agoI shipt my pants!
- wccrawford 9y agoMemes aren't really welcome on Hacker News. But yeah, that's the first thing I thought of, too. For those who aren't aware, KMart had a commercial with that line in it: https://www.youtube.com/watch?v=2xwUuSM06xQ https://www.youtube.com/watch?v=2xwUuSM06xQ
- seattle_spring 9y agoI know. Still felt like it was worth the downvotes.
- deleted 9y ago[deleted]
- kelukelugames 9y agoYes please. I would love an amazon alternative, because I want to support a company that values its employees better. I started by letting my prime subscription expire.
- melq 9y agoWhat leads you to believe Target is better to it's employees than Amazon?
- kelukelugames 9y agoThat's a good question. I live in Seattle and have heard many negatives about Bezos and Amazon culture. Especially from SWEs who have worked at both Amazon and other tech companies. I also have gotten offers from Amazon, and they are on the low end. I haven't heard complaints about Target. So I could be wrong, but I hope competition includes competition for talent, which means better treatment of employees.
- sotojuan 9y agoIDK about the people in warehouses, but regular Target store employees are not treated badly. I mean, it's a low hourly wage job so the expectations are low, but I didn't dislike working there. They were happy to train me across multiple teams and work with my schedule. That said, it highly depends on the branch's general manager. They do make you watch anti-union propaganda during orientation though.
- strictnein 9y agoOne example: they raised their minimum wage to $11 an hour and are on track to bump it to $15 by 2020.
- deleted 9y ago[deleted]
- snowpanda 9y agoI still have Prime, but I understand what you're saying. I might be in the minority here but I feel like Amazon still has better selection in products than Jet/Walmart/Target. I think if they want to succeed they need to have a lot more products, and have them all in stock. Example: Yesterday I was looking for a Motorola phone. When I type it in Amazon I get G, G Plus, E, E Plus, X, Nexus 6, Z, G4 Play, Z Play, Z2 Play etc. All in stock, and with 2 day prime shipping. Then I type it into Target.com and it has G, G Plus and a bunch of E models. Many were limited quantity. It's stuff like that that personally makes me stick with Amazon for now.
- lerie82 9y ago"We aren’t in your city right now, but don’t lose hope! We are expanding into new cities every week. We’ll shoot you an email when we are expanding into your area!" This is definitely not in competition with Walmart, Amazon, or even a company I currently use for grocery delivery (instacart). It's a great move for a company that isn't even nationwide at this point. This should help them to move into more cities.
- strictnein 9y agoIt is directly in competition with all of those companies you mentioned.
- blairanderson 9y agoholy shipt
- saturdaysaint 9y agoSince I haven't read other user reports here, I'll chime in and say I get most of my groceries from Shipt (in conjunction with a local grocer/retailer, Meijer) and it's been a fantastic, reliable service. The shoppers have been uniformly courteous and great at communicating if an item isn't available (you can opt to have them use their best judgement in these scenarios, and it's always worked out well). The experience of getting anything at a large grocery/general store delivered to your house within an hour or two is addictive. I really have nothing bad to say about it - competitors will have to compete on price.
- clairity 9y agoyour use of "local grocer" made me chuckle since that term makes me think of the corner grocery store. meijer on the other hand is one of the 100 largest employers in the country and has ~$17B in yearly revenue.
- freehunter 9y agoI don't know where saturdaysaint is located, but people in West Michigan really do think of Meijer as a local grocery store. Many older people refer to it as "Meijer's", as in "Fred Meijer's Thrifty Acres", the old name for the store when it was far smaller than it is today. They've enjoyed a lot of success, but Michiganders still think of it as "our" store, and they're headquartered in a Michigan town you may have never even heard of.
- harrisreynolds 9y agoI was employee #2 at Shipt and the early CTO. Was really great seeing us go from absolutely nothing to a strong platform, great team and lots of customers. In telling our story early on I would talk about how Lyft was #2 in the ride-hailing space and was a billion dollar company. If we could be #2 in the grocery delivery space we should command a comparable valuation to Instacart (meaning we'd be worth a fraction of their valuation, but it would still be great by any standard). And we did exactly this [1]. With much less cash (60M vs 800M+) and in a very short period of time (we literally hadn't started building this three years ago from today). I haven't been involved in the past couple years, but am still friends with the founder and several on the team; and had a bit of equity (whohoo! :-). Really happy for everyone involved and for Birmingham and Alabama! [1] Here are my ratios based on recent valuations: Lyft/Uber, 11B/70B = .16 Shipt/Instacart, 550M/3.4B = .16 Astonishingly accurate! :-)
- stevenj 9y agoI think you meant a "B" for the Lyft/Uber valuations. :)
- harrisreynolds 9y agoYes... thanks... updated.
- almostApatriot1 9y agoso you jumped shipt after what? A couple months? A year? It's only been around 3 years and you say you haven't been there for years... I guess you got a nice payday, but I wouldn't exactly call this story motivational.
- QAPereo 9y agoNext to political bullshit, this kind of nastiness has to be what I least want to see on HN, although I can only speak for myself.
- 9y ago
- levicole 9y agoI just hope I can still get a publix sub with my groceries.
- bluedino 9y agoThis is a very convenient service. But how viable is it long-term? People will only shop+deliver for $15-20/hour for so long until they realize between the cost of the vehicle and their time (plus taxes), they're not making nearly as much as they think.
- freeflight 9y agoOn their application page, shipt requires of potential "shoppers" own a "reliable vehicle, 15 years old or newer", I wonder how well defined "vehicle" is in the fine print? What's to stop "shoppers" from using something like a bike for the deliveries? Drastically cuts down on the operating costs of the shoppers, adds a good workout, I can see the appeal for many people. Could maybe even be good for marketing "Eco shipt, the local and green delivery". It's what German startup Foodora has been doing with take-out food deliveries, so far quite successfully.
- bluedino 9y agoIn some areas you need a car: the area might not have traversable by bike, you might have a 80 item order, or have a 20 mile trip to make your delivery.
- dwighttk 9y agoHow in the world can they make money on $99/yr?
- kennethologist 9y agoThe markup on the grocery items they "sell" via their service.
- dwighttk 9y agoThe reason I've been seeing people subscribe and save on Amazon was heavily predicated on the "save" portion and only slightly on the "don't have to go to the store" portion. But maybe my sample isn't representative.
- jamisteven 9y ago500m for what exactly? Really would like to see more numbers on this. Also dont see what Target has to gain from the acquisition, seems pointless given what I can see at surface level, there has to be more to this.