Shipt appoints former Target exec as new CEO

Dive Brief:

Same-day delivery service company Shipt appointed former Target executive Kelly Caruso as its new chief executive officer. With more than 25 years in retail, Caruso most recently served as Target's senior vice president hardlines, following a stint as president of Target's global sourcing business.
Outgoing CEO Bill Smith, who founded Shipt in 2014, will remain in the wings as an adviser. Smith indicated he will use this new chapter in his life to refocus his energy on building early-stage companies.
Target acquired Shipt in 2017 for $550 million, and the company operates as an independent subsidiary. Since the acquisition, Shipt has grown to serve 250 markets, doubled its membership and tripled its employee count.

Dive Insight:

Tapping a Target insider to lead Shipt is sure to raise questions about whether or not this foreshadows a more conspicuous relationship between Shipt and parent company Target, despite the pair’s insistence that Shipt remains independent.

Shipt has been bullish on expansion plans since launching in 2014, and accelerated those plans after Target scooped up the startup. Since day one of the acquisition, the e-commerce company has made it clear it operates independently and has many other retailers in its client portfolio — though Target now comprises a huge portion of its business. Target uses Shipt to offer 55,000 products through its online delivery platform from 1,500 of its store locations in 250 markets.

The only post-acquisition difference for Shipt is that it was able to grow more quickly, Harley Butler, Shipt’s CMO, recently told Food Dive. Shipt's retailer-agnostic approach appears to hold value, with a portfolio of 60 grocery partners including H-E-B, CVS Pharmacy, Costco, Lowe’s Foods, Piggly Wiggly, Dierbergs, Lidl, Winn Dixie, and Meijer, despite Target's ownership of the company. The benefit here is that Target helps drive more subscribers, who in turn can take advantage of Shipt delivery not only from Target but from another grocer as well.

Shipt operates on a membership model and markets its services as "a turnkey solution" for online shipping that also provides the last-mile delivery logistics that have stymied so many others in the online grocery game. This could explain Shipt’s growth rate, as many retailers lack the resources, time, and personnel to develop an e-commerce platform in-house. The company also prides itself on providing personalized, member-centric customer experiences through its personal shoppers.

Caruso has had an impressive retail career, but her focus on merchandising and global sourcing show a lack of food-specific experience, which makes the appointment even more intriguing. This could suggest that Shipt is exploring ambitions to branch into a broader range of retail customers beyond grocery.