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Target to buy software startup for faster product delivery

16 August 2017

The retailer announced on Monday it agreed to purchase Grand Junction a tech startup whose software is able manage local deliveries by using a network of almost 700 carriers.

According to the company's website, Grand Junction is the only provider of same-day delivery in every market in the USA and Canada, allowing leading retailers, 3PLs, distributors, and start-ups to offer local delivery through its technology platform and network of 700 local carriers. Amazon and shoppers can choose from a variety of delivery options, including, in some cases, speedy same-day delivery, and Target wants their customers to have these options as well.

Can you tell us how Grand Junction works?

In an interview, Arthur Valdez, Target's chief supply chain and logistics officer was quoted as saying, "Speed matters".

Grand Junction had already been working with Target on a same-day delivery pilot at the big-box retailer's smaller-format store in New York's Tribeca neighborhood.

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Target plans to expand the service to other NY locations this year, and then bring it to other major cities next year.

Target declined to reveal financial details of the acquisition. It also has worked with Instacart for same-day grocery delivery in some markets.

Target's e-commerce grew 22% last quarter, a solid pace to be sure, but below the growth enjoyed by Walmart and Amazon.

"There's clearly an arms race going on from the mass merchants, recognizing that getting everyday essentials in the hands of customers is critical", Michael Lasser, an analyst at UBS Group AG, said in a note published by Bloomberg. Retail experts say they see the move as a way for Target to better compete with Amazon, as more of its customers use e-commerce to purchase products and expect speedy and low-priced delivery. The first Target store opened in Roseville, Minnesota, in 1962 and the parent company was renamed the Dayton Corporation in 1967.

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.

Target to buy software startup for faster product delivery