The news: Subscribers to Target’s paid membership program, Target Circle 360, will no longer face price markups for same-day delivery across the 100-plus retailers on its Shipt network—part of the company’s efforts to offer more value and convenience to shoppers.
The strategy: From Target’s perspective, the perk sharpens its value relative to other paid membership services, which are either confined to a single retailer (Walmart+, Kroger Boost), or force shoppers to pay higher prices in exchange for convenience (Instacart, Uber, DoorDash).
But Target’s pitch is complicated by the fact that many of these programs offer services the retailer does not, such as streaming subscriptions, restaurant delivery, and discounts on gas. Nor does it help that many of the retailers on Shipt’s network are also available on other marketplaces, diminishing Target’s appeal as shoppers’ first port of call.
Still, Target’s promise of parity could win over shoppers whose primary concern is for their wallets. That strategy is working for Instacart, which noted during its Q1 earnings call that retailers with price parity are growing faster on its marketplace than those with higher prices.
Our take: Target’s latest membership update is unlikely to trouble Amazon or Walmart, but the prospect of saving money on same-day delivery from other retailers could convince previously skeptical shoppers to shell out $99 a year for the service.