Last week, Target-owned Shipt announcement Sephora as is its latest retail partner, offering same-day delivery at nearly 500 Sephora stores.
From 2020 to 2025, Technavio research firm predicted the US same-day delivery market will nearly double in size. As demand for same-day delivery has grown, Shipt has tripled its network of buyers and doubled its network of retailers since 2020. In late February, Shipt announcement it was partnering with Walgreens and 7-Eleven to expand to more than 6,000 stores each, increasing Shipt store footprint coverage by more than 40%.
When Alabama-based Shipt first launched in 2014, it focused primarily on grocery delivery in smaller southern cities like Birmingham and Tampa. The company was later acquired by Target in 2017 for $550 million, and since then it has expanded its delivery capabilities by partnering with retailers outside of Target. The new national partnerships demonstrate Shipt leadership’s continued intentions to go beyond grocery, to same-day delivery across all product categories and regions.
Shipt’s Chief Commercial Officer, Rina Hurst, spoke with Modern Retail about the shift from grocery delivery to beauty, small business opportunities for same-day delivery, and the threat of 15-minute delivery. This interview has been edited for length and clarity.
Sephora is your first beauty partner. Are there any unique concerns in the beauty category, in particular, compared to food or convenience items from some of your other partners?
No worries, but lots of excitement. It really complements our product offerings for our consumers. It all starts with the grocery store and we like to surround our grocers in each market with the right specialty retailers. Beauty is one that we have long sought to add to our market.
I will give myself as an example. I placed my first Sephora order this week on Shipt Marketplace and discovered a new product that I had never seen or experienced before thanks to how we were able to market the category and tell the story of the beauty. The second item I added to my cart was just something I get from them all the time and just needed to restock it. So, you know, when I think about what that means for our consumer – I’m a busy mom, I’m a professional – so it saves me a trip to Sephora, it’s saved me a lot of time. I think our consumers will have a similar experience. It can look like a big treat [or] an additional purchase they can rely on Shipt for.
You’ve integrated Sephora’s Beauty Insider points into the Shipt marketplace. Can you talk a bit about how it works logistically and some of the challenges of integrating the branded program into your UI?
We communicate with Sephora on how the data is transmitted, but it is a tight integration between our systems. It’s a reconciliation process that we do behind the scenes between our two systems so it’s super simple for the client.
This year alone, you’ve partnered with Sephora, 7-Eleven, and Walgreens. What do you look for when adding a brand or retailer to Shipt?
7-Eleven and Walgreens are two great national brands, known and loved across the country by so many consumers. What was great is that it allowed us to focus on strengthening our convenience segment: pharmacies, proximity, those quick trips. With this addition, we have increased the number of stores we cover nationwide by 40%. Additionally, if we review 100% of the customers we cover in the United States, every customer now has access to at least one pharmacy or convenience store in their market.
And that’s what I seek to do: I seek to complement the business partners we offer our consumers on a market-by-market basis. In every market that matters, we seek to ensure we have the right preferred local grocer, the right general merchants, and the right set of specialty verticals that surround drugs, convenience, pets, alcohol, pharmacy, beauty, clothing, shoes… the list keeps growing.
Last year we saw many big retailers adopt same day delivery. However, I wonder if you think there might be a movement for smaller brands and retailers with maybe one or two stores to also adopt the model. Is this something you could leverage at Shipt?
It is a really interesting and unique space. Smaller retailers don’t have such sophisticated e-commerce capabilities, but why can’t Shipt be there to help them too? This is exactly where my team is focusing right now. They look market by market to think, “What are these beloved retailers that maybe have one or two doors but are just filling a void for us?” This is how consumers buy.
I will give an example. It’s not tiny, but just one example of a local favorite. On the West Coast – we are seeing significant impact in the Pacific Northwest – we have added PCC [Community Markets] in our marketplace. It is a small grocery store, but through cooperatives. We’ve added something that isn’t a traditional partner that’s easy to get on board: they don’t have the robust catalogs that we get from some of our big partners like Meijer and Target. But we have worked hand in hand to bring their catalog and their experience to life on our site.
But I think it goes even further. Who is your favorite butcher? Where do you get your wines and spirits in your city? What is your favorite pet store? These are the kinds of questions we ask ourselves and we take a very consumer-centric approach.
Along with the rise of same-day delivery, there has also been the rise of these super-fast 15-minute delivery players. How does 15-minute delivery fit in with a same-day delivery platform like Shipt? Are they competitors or are they serving a completely different customer?
Some of our competitors have gone into space very aggressively. It’s often in very urban markets, often branded items, and one or two items in the basket. Our customers shop on Shipt over 20 times a year and they build $100 carts. Some come in and add an element or two — but it’s a very, very, very small percentage. We often serve dense suburban areas.
When you start asking retailers “what problem are you trying to solve with 15 minute delivery?” most of them are not yet able to articulate the answer. I would say we are watching carefully. And we think about what that space will mean and how it will disrupt what we do, but I think speed for speed’s sake is not the right answer.
We will focus on meeting our customer’s expectations and ensuring that what the customer requests is delivered accurately and within the time they requested. In the grocery store, it’s often less than an hour after the order. In the non-grocery space, it’s often three, four or five days. Party City orders are placed on Mondays for Saturday delivery, even with Best Buy and Bed Bath and Beyond. It’s an interesting dichotomy.