Dive Brief:

• Same-day delivery service is now available from Target in 47 U.S. states for $9.99 per order, or a $99 annual membership fee, according to a press release from the company and a CNBC report.
• Target customers can now order 65,000 products with same-day delivery through the Target website. The option will be incorporated into the Target app before peak season, according to CNBC. 
• Delivery is enabled by the Shipt same-day delivery platform, which Target acquired in 2017. Shoppers no longer require a Shipt account to use the service. 

Dive Insight:

Though it may be tempting to see this move as an escalation of the one-day shipping gauntlet thrown by Amazon when the e-tailer announced free Prime shipping would transition from two days to one — wider expansion of Shipt's same-day service across Target's network has been fairly inevitable since Target acquired the platform in 2017. 

Ironically, same-day delivery is actually somewhat easier for retailers to achieve than one-day shipping since same-day services generally rely on couriers and the gig economy to move orders — through providers like Shipt, Deliv, Roadie, Instacart and the like — and not traditional 3PLs. 

As long as customers are willing to accept fees to ensure the business is profitable, the bigger hurdle is ensuring the products consumers want are close enough to them to make a same-day or even one-hour delivery possible and to make the product offering attractive. 

Target already uses its stores as the main engine behind its e-commerce fulfillment, which the CEO touts as a major cost saver for its e-commerce business, so it may be well-positioned to deliver on customer expectations in terms of inventory selection. 

Same-day delivery leverages that same inventory strategy and could prove even better for margins since the $9.99 fee is much steeper than Target's free two-day shipping for orders over $25. Plus the retailer attributes more than half of its digital sales growth to same-day options like Shipt, pick-up and drive-up orders. 

That said, with Walmart and Amazon all offering some form of same-day services, making same-day delivery a smoother experience available to more customers may offer Target a competitive edge in some geographies now, but that edge is not likely to last.