Target to Buy Shipt for $550M
bloomberg.com
bloomberg.com
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! :-)
I don't know that it would affect Shipt's business a ton; its not like they are super tied to just the local (grocery) market any more.
That said, as much as I'd love it, Birmingham almost definitely isn't getting HQ2. Public transit is next to non-existent, the greater metro area BARELY meets their minimum requirement (~1.1m as of 2010), and while we are close to some major universities they don't have super strong CS departments (which might not be the end of the world); UAB probably has the strongest (and there are ~18k students total).
But, if somehow BHM HQ2 happens I will glady streak naked through my neighborhood wearing an Amazon box as a helmet.
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.
I mean hell, people in West Michigan think highly of Amway of all places, because they pay well and employ a ton of people at their headquarters in the area.
...not really. A very token few people actually think highly of Amway.
The majority will quietly put up with Amway, since they do give a few people a small living, but will always temper that statement with "of course Amway is a giant pyramid scheme scam and you shouldn't ever be a reseller, don't fall for the trap".
They'll just coat that statement in Midwest-nice language that sounds like praise. If you don't speak the language, it's easy to miss the subtleties.
I say this because it's in stark contrast to what you mentioned, anyone who doesn't work for Amway corporate will generally have a negative opinion about Amway.
Which is competing / catching up with WalMart.
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.
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.
Prime Now is even more insane. Last item I ordered arrived in 18 minutes from pressing the button.
I'm sure this happens, I just am wondering where one must live for it to be a common occurrence.
Just give me a date that you can hit 99% of the time. I don't mind a missed delivery every now and then, but lately 9 out of 10 deliveries are late.
Walmart makes you go to the back of the store. The walk alone takes a few minutes. Then you wait for an employee to show up, then you wait for them to lookup your order, then they go into the back room to get it. Then walk all the way back out.
For Target the pickup spot is right by the entrance and there’s already a person waiting there. They just scan your barcode, show your ID, and hand you your item.
When it works it works really, really, really well. I mean, in and out in less than two minutes. However, there was a time the employee didn't get a notification, so it might still need to get the kinks ironed out.
I agree that previously the store pickup was an afterthought and not always run very well.
I did an in-store pickup at Walmart last night. I got a text message with the pickup # and when I went there (Walmart's on my way home and I stop there most days), the greeter at the door was the person who got my order. Pickup station was right by the door and I was done in under 2 minutes.
It's improved a lot in the last year!
It almost always has employees in the pick-up room. If not, you can tap a screen at the counter that alerts an employee for you.
You show your license. It takes very little time to look up the order, they just punch in your order number or look your order up by name.
The pick-up items are all stored right in that pick-up room, so there's zero wait for them to go into another storage room to get your item.
Usually takes a few minutes total. I've used them to do an item pick-up in store maybe a dozen times in three years, zero bad experiences so far.
They also have this huge digital tablet thing where you can type in your order id and someone can grab it for you quicker.
There's never anyone there and you generally wait several minutes after you've hit the pager on the card reader.
Your store should switch over to the new system sometime soon.
I was there to pick up photos (thus store has online pickup and photos at the same place)... They screwed up my order and I waited 45 minutes and left empty handed because no one there knew how to make a photo calendar and doesn't k know where mine went. But I digress.
I basically witnessed 45 minutes of a train wreck of people trying to pick up orders (probably Christmas presents) from a disorganized and understaffed center. No one was happy...
Yet you likely brag about how many "steps" you had on your Health app on your iphone.
Fucking walk.
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.
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.
They do make you watch anti-union propaganda during orientation though.
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.
Walmart offers third party selling but not as streamlined and its not shipped by Walmart. Just another ebay store.. If you have a problem with an order, you deal with Amazon and not the vendor.
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.
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.
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.
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.
I'm curious how this is grasping.
They are clearly copying amazon, but doing a good job in my opinion. The site is much better than walmart's.
The online pickup is directly in front of a lesser used entrance so you don't fight for parking.
Also sears has lots of online loyalty incentives through shop your way that makes their prices probably the best... Problem is they don't have a large selection of items.
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.
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:
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-suppor...
What I know for sure is that the investors are super happy with their returns.
It was not a hostile takeover so maybe Bill Smith thought they had a brighter future with with Target's investment.
From the article, it says that Target and Shipt have been in discussions since the summer so Bill and his team had several months to work out the terms of a friendly deal.
Crunchbase says they had 3 rounds of funding.[1] If it's reasonable to guess that Bill still has at least ~30% equity left, it would translate to $160+ million payout. Maybe staying independent had more risks in his mind.
Every so often the smaller company gets its executives placed high in the organization making it more like a merger than a buyout. Some of those turn out pretty well.
The ones where they talk about a strategic purchase and learning this and blah blah that but they end up strangling the company end up sounding really good at the beginning but then turn sour quick. Also the rank and file employees usually get screwed in this scenario.