Online grocery marketplace and delivery service Shipt has partnered with Costco Wholesale to bring the warehouse retailer's products to customers in the Tampa metro area.
The Shipt mobile app enables members to shop a full selection of Costco consumables, note any preferences, choose a one-hour delivery window and pay for their order. With the Tampa launch, area residents will be able to try Shipt for two weeks for free and receive $15 off their first order. Shipt memberships with unlimited free deliveries are available for an annual fee of $99.
Leading up to the Tampa launch, Shipt plans to grow its network of shoppers and identify opportunities to support community organizations throughout Florida. Shipt also said it is planning many other strategic initiatives for later in 2017, including making its services available in 50 markets and to more than 30 million households by the end of the year. The company said it has forged new alliances with national and regional retailers, launching new metros and expanding service areas in existing markets.
Shipt is just the latest firm in the grocery shopping and delivery market to to talk about ramping up its efforts. Instacart recently announced $400 million in funding to fuel expansion, and Postmates also has talked up its own expansion plans. Is this all because Amazon is intent in remaking the entire grocery shopping experience? That probably has a lot to do with it, although Shipt and its start-up ilk also just might be ready for the next steps in their own evolutions.
Shipt has been around a for a few years and grew pretty quickly, getting itself into 27 markets primary in the south by last summer, when it announced it had raised $20 million on Series A funding. Now it's talking about touching 50 markets by the end of the year, and in the competitive grocery delivery environment, it will need to continue keeping a fast pace with expansion. At the same time, it will need to point out how its better and different than other grocery delivery firms it may run into as it expands.
Like Costco, Shipt runs on a membership model, and there may be some logic with this new partnership that Costco members will readily embrace another membership opportunity. Shipt did not talk about where the Costco relationship might go from here, but the single-market launch sounds like it might be a trial of sorts. If it goes well, perhaps Shipt will start delivering Costco products in other markets.
While Amazon's plans for Amazon Go may have the grocery startups scrambling a bit, and are leaving the market wondering how Wal-Mart will continue to evolve its own grocery strategy, we haven't heard much about the effect on Costco. Will it go the route of copying certain Amazon innovations? Delivery is one of many segment where Amazon has differentiated itself, so maybe partnering with an up-and-coming delivery firm could be the beginning of more innovations to come.