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Target launches same-day delivery as retail wars heat up

In the latest skirmish in the retail wars between online and offline shopping, Target is introducing same-day delivery.
Image: Target
Customers walk with their purchases from a Target store, in Methuen, Massachusetts on June 27, 2016.Elise Amendola / AP file

In the latest skirmish in the retail wars between online and offline shopping, Target is introducing same-day delivery.

The first stores to get the new service will be stores in Birmingham, Alabama and South Florida on February 1st. The next week the service will roll out to more locations in Alabama, Georgia, North Carolina, South Carolina, and Tennessee. And by the end of 2018, the rest of the country.

“Same-day delivery was at the top of our list when we were thinking about ways to make shopping at Target even easier,” said John Mulligan, Target's executive vice president and chief operating officer said in a statement.

The new service will be offered in partnership with Shipt, an online grocery marketplace the retail giant acquired in December for $550 million. Customers can log into the Shipt app and purchase over 50,000 items from Target.

The service already has a network of more than 20,000 personal shoppers who buy items for shoppers and deliver them within a few hours. Shipt is hiring 100,000 more nationwide.

The offering is a new way for Target to compete with online shopping sites like Amazon, which dominates 38 percent of all online shopping, and whose whose customers have gotten used to speed, convenience, and low prices.

While Amazon does offer its own grocery delivery called Amazon Fresh, it has scaled back the number of location it's offering it after it bought Whole Foods Market. In some ways grocery still remains a final frontier where many shoppers are still willing to go out and buy the stuff in person. That's a market Target is anxious to capture and keep.

"Target clearly sees the writing on the wall. If they're going to stay competitive, they need to up their convenience game to remain competitive with the likes of Wal-Mart, Jet, and Amazon,” Darren Seifer, a food and beverage industry analyst for NPD, told NBC News.

“Particularly with Amazon that already has same day delivery in their infrastructure, and with their recent acquisition of whole foods, it now allows them to deliver groceries as well as the rest of their merchandise in many same day delivery markets.”

It's not just milk and bread either. The service will also deliver "essentials, home, electronics and other products." By the end of 2019, it will also include all Target's major product categories.

Enrolling in the Shipt program costs $99 per year. That's cheaper than AmazonFresh, which costs a $179.88 per year, on top of a $99 Prime membership.

The move comes as analysts speculate that Amazon might want to buy Target.