Big-Box Briefing: Target-owned delivery app Shipt makes AI push, mirroring Instacart
Shipt, the delivery app owned by Target that powers the retailer’s same-day delivery service, announced an AI assistant last week on the same day as one of its biggest competitors.
On Wednesday, Shipt said it launched “Ask Shipt,” an AI assistant on Shipt’s app and website where customers can describe what they’re looking for to build a list of items they can directly add to their cart, or upload a photo of a food item to identify which items they would need to make it. Instacart separately announced that it had launched its own AI assistant, “Clementine,” with similar functionality, and that it would also make a white-label shopping assistant available to other retailers to implement on their own platforms.
Katie Stratton, chief growth and strategy officer at Shipt, told Modern Retail the company aimed to create an AI assistant that would make it easier to build a list. She said list-making and cart-building are often the most difficult parts of the shopping journey for customers. Last month, the company separately announced integrations with ChatGPT and Claude so customers can build a cart with Shipt through those platforms. Customers can edit the list of items given by the AI assistant before adding them to their cart for checkout, to a list, or to a shared list with friends or family members.
“Many times you don’t even know what you’re looking for yet,” Stratton said. “You just know you have something that you need something for, so you want to just describe what that is.”
Stratton said the fact that Instacart also announced a similar assistant confirms for her the consumer need for help in building shopping carts or in making that process faster. “Now, we have a solution to be able to deliver on that,” Stratton said. “When I see competitors launching similar things, it’s validation that this is delivering on a real need.”
Ask Shipt can also recommend Shipt Kits, which are bundles of products curated by the Shipt team that are recipes or a collection of items for a specific occasion, such as a football watch party, or for school lunches. The assistant can sub out certain products for others, like if a shopper only wants products that are gluten-free.
Shipt’s assistant has advertising functionality via its retail media network, Shipt Media, according to Stratton. Brands can bid on being the brand that appears on the curated list customers receive when asking for recommendations. “As the customer, of course, I could always go into the cart” to make adjustments, Stratton said. “I remain in control as the human who’s placing the order.”
Stratton said the difference between Shipt’s assistant and others is that the platform itself is more curated than others. It has roughly half the number of Instacart’s shoppers or independent contractors: Instacart reported that it had about 600,000 at the end of last year, while Shipt said it has around 300,000. Instacart said last week it has more than 2,200 retail banners on the platform, while Shipt said it has about 120. Shipt also has a feature that allows customers to select a “preferred shopper” to deliver their orders for them.
“We’ve never been the marketplace that wants to be everything to everyone,” Stratton said. “You need to be able to have a trusted relationship and dialog with the shopper who’s in the store finding the items for you.”
Shipt is wholly owned by Target but operated independently, though Target is also a retailer partner and Shipt powers Target’s same-day delivery service. Last week, Target separately said it has launched AI-powered photo search and customer review summaries in recent months. In August, the company hired former Lowe’s tech executive Chandhu Nair as its chief AI officer. Target still has yet to introduce a consumer-facing AI chatbot, outside of partnerships with Google, Microsoft and OpenAI through which it appears in third-party AI assistants.
“While still small in total today, as more consumers begin to explore the benefits of agentic shopping, Target’s digital traffic sourced from external AI platforms is growing more than 3.5 times the industry as compared to a year ago,” Target CEO Michael Fiddelke said during the company’s second-quarter earnings call in August.
What we’ve heard
“We’re making progress on execution across the business, but there’s still work to be done, and opportunity remains inside our stores: better in-stocks, better merchandising, better standards, better shrink management. These are not new ideas, but customers notice when we execute well. … At the same time, we have to be relentless on cost. Our teams are moving with more speed and urgency, and sourcing and savings came in ahead of plan this quarter.”
–Kroger CEO Greg Foran during the company’s second-quarter earnings call last week, adding that on-shelf availability reached an all-time high
Numbers to know
20%: Sales growth in Kroger’s e-commerce business last quarter, led by strong growth in delivery, the company said.
$1.7 trillion: Expected total holiday retail sales this year, which would be a 4-5% increase from last year, according to Deloitte.
14: Number of new stores Costco plans to open in the next two months, according to Seeking Alpha.
What we’ve covered
Walmart adds marketplace data, deeper AI features to Scintilla insights platform
As part of Walmart Data Ventures’ Inspire conference this week, the company announced several new Scintilla features coming next year, including access to marketplace data, customizable dashboards, custom alerts, a deeper version of its Marty agent for Scintilla, and a closer link between the Scintilla data platform and both the Scintilla In-Store supplier app and Walmart’s replenishment systems.
Kroger’s ad business sees most profit growth since 2021
Profit for the Kroger Precision Marketing advertising business grew 24% in the second quarter, according to Kroger’s latest financial earnings release. This marks the company’s best retail media profit growth since 2021, CEO Greg Foran told investors on a conference call Friday morning. In a statement, a Kroger Precision Marketing spokesperson said the division has grown thanks to an increase in on-site customer traffic, as well as new opportunities for brands such as shopping assistant ads and collaborations across social media and programmatic advertising.
Walgreens says it’s focused on ‘higher-performing’ ad placements as it tries again with digital screens
Walgreens plans to add digital screens with advertising and educational content in 1,200 of its stores beginning in October, a partnership with in-store media firm Looma. Walgreens said it selected Looma because of how it places digital screens directly alongside the products they support. This, Walgreens said, “delivers content designed to educate rather than interrupt shoppers” and measures performance using full-funnel metrics rather than just on how often the ad played.
What we’re reading
Amazon adds new employee grocery discount for all U.S. workers
Amazon said it will give all its U.S. workers access to a 10% discount on groceries from Amazon.com and Whole Foods Market online as well as a 20% discount on in-store Whole Foods Market and Daily Shops purchases, Progressive Grocer reports. Amazon said this benefit will be available on their first day of work without a cap or minimum purchase.
Mark Weinstein joins Target as CMO and guest experience officer
Former Hilton CMO and head of luxury brands Mark Weinstein has joined Target as CMO and guest experience officer, reporting directly to Target CEO Michael Fiddelke, according to Adweek. “Mark has a proven ability to understand what consumers value and turn those insights into brand connections that feel relevant and personal,” Fiddelke said in a statement.
Papa Johns to offer delivery from Walmart
Papa Johns partnered with Walmart to offer deliver using Walmart Express Delivery from restaurants near Walmart stores, Restaurant Dive reported. The company had already added a restaurant tab to its app and website for Subway deliveries and has since also added delivery from Dunkin’ as the retailer builds out what appears to be an alternative to DoorDash or Uber Eats, especially for Walmart shoppers delivering food alongside a large load of groceries.