Target to acquire Grand Junction to improve delivery
- Author: Wendy Palmer Aug 16, 2017,
Aug 16, 2017, 15:30
To maintain as quick a delivery time as possibly, Target is acquiring a transportation technology company based in San Francisco that facilitates same-day deliveries. Arthur Valdez, Target's executive VP, chief supply chain and logistics officer, and Rob Howard, CEO of Grand Junction, discussed the acquisition in the following Q&A, posted on the retailer's website. "It will also boost our ability to offer new services - like same-day delivery, and even assembly and installation - to our guests".
The tech company is already working with Target on a same-day delivery pilot at the Target store in the Tribeca neighborhood of New York City. They'd like to expand same-day delivery to more NY stores later this year, and to stores in other major cities next year. And the offering will hit other major markets in 2018.
Like Expedia for shipping and delivery, Grand Junction allows retailers to compare and choose from amongst the speediest and most efficient delivery methods. As part of the agreement, Grand Junction's 13 employees will relocate a few blocks to Target's downtown San Francisco office and set about helping the retailer bring delivery to more areas.
When the deal is closed, Howard will become vice president of technology at Target. That came after a pilot program in 2014 offered a Rush Delivery for same-day.
With Grand Junction, Target could get deliveries to customers faster.
Target has adopted several measures aimed at accelerating its sales growth, including a focus on digital business, small-format store openings, supply-chain reinvention, and the remodeling of large stores. An industry consulting firm said it expects that instant and same-day deliveries to represent between 20% and 25% of the revenue for standard parcels by 2025. McKinsey also surveyed people in the U.S., China and Germany and found that 25% were willing to pay higher prices for same-day or instant delivery.
"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.