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Target just signaled how it plans to compete with Amazon Prime

Dennis Green   

Target just signaled how it plans to compete with Amazon Prime

Target

Reuters/Jim Young

Target is expanding its shipping options so that customers don't have to go to the store.

  • Target is rolling out free two-day shipping for the first time ever.
  • The perk is available for orders of $35 and over. All orders placed by holders of Target's in-house credit and debit cards, known as the Redcard, now have free two-day shipping without an order minimum.
  • It's a direct response to two-day shipping offerings from Amazon and Walmart.

Target is finally jumping on the two-day shipping bandwagon.

The retailer announced it is now offering free two-day shipping on "hundreds of thousands" of items. The perk is available to all orders over $35 and with no limit to holders of Target's Redcard credit and debit cards.

Redcard membership is free and includes other perks, like 5% off all orders. Target previously offered free standard - or three-to-five day - shipping with no order minimum for all items purchased with a Redcard.

Only select zip codes are eligible for the tw0-day shipping option, and customers in most areas would need to place their orders by noon. Full details will be on each item description, including whether it's eligible for two-day or standard shipping.

Target is one of the last major holdouts to begin offering free-two day shipping.

It's the signature feature of Amazon's Prime membership program, which costs $99 a year or $12.99 a month. Amazon requires no minimum order for two-day shipping, and it's one of the things that keeps customers coming back to the site. Prime also offers other perks like two-hour delivery with Prime Now, streaming access with Prime Video, and even one-day shipping on certain orders in some zip codes.

Walmart offers free two-day shipping with every order over $35. Target's offering most closely matches Walmart's, but Target's differs with its option for cardholders.

The proliferation confirms that two days is now the standard timeframe for online shopping as customers demand more options and quicker delivery. Target's approach of attaching it to payment cards is unique.

While this makes the benefits technically free for card members, Target is betting that it can reap some benefits with the fees credit and debit cards typically carry for customers. With its Redcard, Target is starting to build a membership program somewhat similar to Amazon Prime.

Target has added other benefits over the last year, like early sale access and exclusive product offerings, both of which Amazon offers Prime members in some form. Redcard members even got early access to online Black Friday deals in 2017.

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