Shipt

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2020 Shipt logo.png

Shipt is an internet-enabled grocery delivery service founded in 2014 by Bill Smith, and currently operating as an independent subsidiary of the Target Corporation of Minneapolis, Minnesota. The CEO is Kamau Witherspoon.

Shipt uses a smartphone app and website to allow subscribers to shop for groceries online, which are then purchased and delivered by freelance workers, called "shoppers". The service employed more than 300,000 shoppers in 5,000 cities in 2021. Shipt works with retailers' inventory management systems to coordinate offerings. It operates at Publix, Kroger, H-E-B, Winn-Dixie, Costco and various other major retailers in specific markets.

Original Shipt logo

When it was first launched, Shipt specialized in same-day delivery from retailers like the Apple Store, Macy's, Target, Best Buy, Staples, Toys R Us, Schaeffer Eye Center and Home Depot. Customers at that stage would buy directly from the store's website, and select in-store pickup, specifying that a "Shipt Pilot" would be picking it up for delivery. After testing a "Shipt Meals" service with little success, and grocery deliveries with greater success, the company quickly transitioned to focus on the latter.

Shipt's offices are located in the John Hand building on 1st Avenue North and 20th Street in downtown Birmingham. It began on the 6th floor, but has expanded to multiple floors in the historic skyscraper. The privately-owned company raised $20 million in investment capital in 2016 and progressively expanded to 20 cities. The fast-growing company, with 70 main office employees, added a large illuminated sign at the top of the John Hand building.

Amazon's acquisition of Whole Foods spurred more retailers to partner with delivery services, and Shipt soon began operating in as many as 72 cities. In late 2017 the business was acquired by Target, Inc. for $550 million. The subsidiary's headquarters offices remained Birmingham. In 2018 Shipt secured up to $19 million public incentives from Birmingham, Jefferson County and the State of Alabama for expansion of its operations in the city that could add as many as 881 new jobs. The city's five-year investment would involve Shipt's participation in Birmingham's "Talent Investment Program", "Talent Acceleration Program" and "Talent Optimization Program" to reimburse some of the company's costs to recruit and train workers.

In early 2019 Shipt leased 60,000 square feet of office space in the Wells Fargo Tower, which was renamed "Shipt Tower" with the addition of its new logo to the roof in 2020. Kelly Caruso succeeded Smith as CEO that same year. During her tenure, the company began testing an algorithm-adjusted pay structure in place of its previous rate of $5 plus 7.5% of each order. Workers in Kalamazoo, Michigan experienced sudden and drastic cuts in pay.

Government-enforced social distancing measures announced during the 2020 Coronavirus pandemic boosted demand for grocery delivery services, but caused many workers to worry about their increased risk of exposure. Willy Solis, a Shipt shopper in Dallas, Texas, organized a "walk-off" to demand more protections and hazard pay. A picket of about 20 Shipt workers marched in front of Shipt Tower in October, 2020, protesting policies that reduced their take-home pay while corporate profits tripled.

In 2021 Shipt added support for numerous dietary preferences, allowing users to easily find products that support various diets. That summer the company entered into an agreement with Continental Properties to offer delivery services to residents at its 60 apartment complexes across the country. In September of that year the company added nearly 2 million households to its service area, including delivery from CVS, GNC, Bed Bath & Beyond, and Party City. That same month, the company announced a partnership with Visa to provide limited time free Shipt subscriptions to credit card holders.

In 2022 the attorneys general of Minnesota and the District of Columbia filed civil suits against Shipt for allegedly misclassifying its shoppers as independent contractors under the laws of their jurisdictions. The company rolled out a batch of new perks for members in May 2023.

In March 2023 Shipt ended its agreement with the State of Alabama without collecting any state incentives. Having hired only a fraction of the nearly 900 jobs it anticipated filling, the company also failed to qualify for many of its city and county incentives. Just under $3 million in public funds were used to support the company, with some of that going toward workforce development rather than direct payments. In October 2023 Shipt laid off around 3.5% of its workforce and closed many advertised open positions.

CEOs

References

  • Davis, Bryan (February 6, 2015) "Birmingham's Shipt launches in John Hand building." Birmingham Business Journal
  • Poe, Kelly (May 23, 2016) "Shipt adds name to Birmingham skyline." The Birmingham News
  • Alexander, Alan (July 27, 2016) "Meet an Emerging Influencer of Birmingham: Shipt's Bill Smith." Birmingham Business Journal
  • Giammona, Craig (December 12, 2017) "The Amazon-Whole Foods Deal Is Turning Out to Be Good for Delivery Startups." Bloomberg
  • Wahba, Phil (December 13, 2017) "Target To Acquire Shipt for $550 Million to Speed Up Same-Day Delivery." Fortune
  • Thornton, William (July 9, 2018) "Shipt could hire 881 as part of Birmingham expansion." The Birmingham News
  • Koplowitz, Howard (July 10, 2018) "Birmingham City Council approves Shipt incentives to keep company's HQ in Magic City." The Birmingham News
  • Godwin, Brent (January 7, 2019) "Shipt inks huge lease downtown; skyscraper will become Shipt Tower in 2020." Birmingham Business Journal
  • Menegus, Bryan (February 12, 2020) "'Every Single Person Is Losing Money': Shipt Is the Latest Gig Platform to Screw Its Workers" Gizmodo
  • Casagrande, Michael (April 7, 2020) "Shipt protest will last as long as needed, leader says." The Birmingham News
  • Sheets, Connor (October 18, 2020) "Shipt workers demand better pay, treatment in protest at company’s Birmingham headquarters." The Birmingham News
  • Thornton, William (July 8, 2021) "Shipt introducing dietary preferences feature on app." The Birmingham News
  • Bagwell, Dan (July 29, 2021) "Shipt teams up with apartment developer for same-day deliveries." Birmingham Business Journal
  • Thornton, William (September 9, 2021) "Shipt announces largest nationwide expansion in three years." The Birmingham News
  • West, Ty (September 20, 2021) "Shipt forms huge partnership with Visa for same-day delivery benefit for cardholders." Birmingham Business Journal
  • Patchen, Tyler (February 1, 2022) "Shipt names Kamau Witherspoon as its new CEO." Birmingham Business Journal
  • Thornton, William (June 23, 2022) "'I lead with empathy': New Shipt CEO Kamau Witherspoon lays out his vision." The Birmingham News
  • Thrailkill, Laurel (October 27, 2022) "Shipt facing lawsuits regarding employment rights allegations." Birmingham Business Journal
  • Thornton, William (May 23, 2023) "Shipt introduces new member perks, personalized dashboard." AL.com
  • Denham, Hannah (August 11, 2023) "As Birmingham’s Shipt fails to meet hiring goals, Alabama withholds millions in incentives." AL.com
  • Thornton, William (October 24, 2023) "Shipt lays off 3.5% of filled positions, closing many open ones." AL.com

External links

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