Target plans to acquire the technology assets of same-day delivery startup Deliv, according to TechCrunch.
The news comes just one day after The Wall Street Journal reported that Deliv planned to halt its on-demand delivery operations in early August. Target previously worked with Deliv, running small-scale tests with the delivery service provider in 2019 and early 2020.
Terms of the deal were not disclosed, but Target says this is an R&D deal and not an outright acquisition of Deliv's business. The acquisition is expected to be completed in about a month. TechCrunch says some Deliv employees are expected to join Target, including Deliv CEO Daphne Carmeli.
The retailer believes, according to TechCrunch, that there is long-term potential with Deliv's tech, which groups together orders going to the same area. Target's current delivery offerings do not have this feature. The retailer will test and research potential uses for Deliv before integrating it into the company's current delivery offerings.
Target already has one delivery service, Shipt, which it purchased in 2017 for $550 million. At the time, it was the company's largest acquisition. TechCrunch predicts that Target's deal with Deliv has a much lower price tag than Shipt.
Target and Shipt expanded as a result of the coronavirus outbreak. Shortly after states began enforcing stay-at-home orders, Shipt announced that it intended to hire around 100,000 full- and part-time positions across the country in order to meet the surge in demand. This included up to 2,000 shoppers in the Twin Cities.
But the growth didn't quite go according to plan. In early April, shoppers for Shipt said they were going to walk off the job unless the company met their demands for pay and protection during the coronavirus outbreak. On the day of the walk-off, Shipt said it would offer bonuses to its most active workers, but they fell short of the pay boost of $5 per order that workers wanted.
Eventually, TechCrunch says, Target could use the combined powers of Deliv and Shipt to become more competitive with large e-commerce companies like Amazon.
