Target slashes Restock delivery fee for loyalty members

Dive Brief:

Target Restock, the mass merchant’s next-day delivery service of household essentials, is now available coast to coast for free to REDcard members and $2.99 for all other orders, Target announced on its Bullseye blog Tuesday.
Through Restock, customers can now order products like paper towels, baby food and laundry detergent online as late as 7 p.m. to have those items delivered the next day. Orders are fulfilled from surrounding stores, the company also said.
Target also recently launched Target Restock ordering through the Google Home device or with a smartphone using the Google Assistant app.

Dive Insight:

Target is beginning to flex its newfound delivery muscles since its $550 million purchase of same-day delivery startup Shipt late last year and other recent in-house initiatives to build up its delivery service.

Target Restock is the first of the retailer’s e-commerce fulfillment services to expand nationally this year: its Drive Up curbside pickup service and Shipt same-day delivery are set to follow "soon," according to an email to Retail Dive. Earlier this year, Target announced free two-day shipping on orders over $35 for all customers and same-day delivery at a cost at some small-format stores when consumers shop in-store.

Keeping up with rivals Walmart and Amazon on delivery is an ongoing challenge, and one that can only be achieved by speeding up fulfillment and logistics systems. For Target, the key so far is to lean on its competitive advantage for help — stores.

Offering up free delivery on Restock orders for loyalty members is a challenge to Walmart and Amazon, which are locked in battle over consumer product sales. Walmart, which last year dropped its Shipping Pass membership fee, is working to get customers into stores to pickup online orders. Target’s Restock fee drops arrive as Amazon is sending out emails to its Prime customers reminding them that their annual membership cost is rising $20 to $119. Its Pantry program, most analogous to Restock, is an add-on service that now costs $7.99 per box, up from $5.99.

In another effort to fight Prime while capturing the non-membership oriented shoppers targeted by Walmart, Target is also testing a new tier for its loyalty program, dubbed "Target Red," which gives customers perks without having to sign up for its Redcard credit card.