Target (NYSE: TGT) is finally making more aggressive moves to win customers who want to make purchases, including groceries, online.
The big-box retailer announced Wednesday morning its plans to acquire same-day delivery service platform Shipt, a rival to Instacart, for $550 million in cash.
The news builds on the company's billion-dollar investment strategy and longer-term goals to catch up with rivals Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) which have been making splashes across the industry for much of 2017.
While Amazon scooped up Whole Foods in August and Walmart purchased Jet.com in late 2016 to deepen their reach, Target has been focused on its turnaround efforts and pushing for growth internally. As a result, investors see Target as a comparatively weaker player in the food space.
"With Shipt's network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country," Target Chief Operating Officer John Mulligan said in a statement.
Alabama-based Shipt, which also has an office in San Francisco, will continue to work with other retailers despite being owned by Target, Shipt CEO Bill Smith said. Those other partners include grocers Costco (NASDAQ: COST) Kroger (NYSE: KR) Meijer and HEB (NYSE: HEB)
Mulligan said the company hasn't yet had discussions with Instacart about their future. The retailer has been working with Instacart for a number of years for grocery delivery in certain markets.
Target shares gained 93 cents, or 1.5%, to $61.95.
