Shipt offers free membership for Visa credit card holders - The Entrepreneurial Way with A.I.


Tuesday, September 21, 2021

Shipt offers free membership for Visa credit card holders


Dive Brief:

  • As it looks to build out its membership base, the company announced on Monday it's now providing trial periods for free and discounted membership to Visa consumer credit card holders.
  • With the partnership, all Visa cardholders in the U.S. can now create a Shipt account and enroll for free delivery on orders over $35, per the release. Visa Infinite cardholders can get up to three years of free Shipt membership, while Visa Signature ones can get it free up to three months and then nine months of membership at 50% off. All other cardholders can get one month of free membership, followed by 50% off for three months.
  • Shipt is focusing on its selection of retailers, personalized offerings and the high-touch service provided by its personal shoppers to distinguish itself in the e-commerce delivery race, Shipt CEO Kelly Caruso said in an interview. 

Dive Insight:

By teaming up with Visa, which reaches roughly half of U.S. households and has widespread name recognition, Shipt is gearing up to boost the reach of its membership as the Target-owned company vies with Instacart, Amazon and other major e-commerce firms for online shoppers.

The majority of Visa's cardholders fall into the offering with free membership for three months, Caruso said. The partnership stemmed from Visa reaching out to Shipt, she said, and comes at a time when retailers and e-commerce firms are ramping up for the holiday season. Shipt, which already skews heavily toward membership, will be watching for engagement and stickiness among Visa cardholders, Caruso said.

The Shipt Everyday membership costs $99 per year and provides free delivery on orders over $35 and a $7 delivery fee on orders under $35. Shipt also offers delivery passes, which cost $10 each, and discounts on pass packs of three for $27 and five for $40. 

The Visa partnership is Shipt's latest push to add new customers and convert them to members. This summer, Shipt launched the Preferred Shopper tool to let members designate their top personal shoppers to handle future orders. With the new tool, Caruso said Shipt is looking to solve the problem of substitutions by furthering connections between customers and personal shoppers that can lead to relevant substitutions based on knowledge of customer preferences. 

Shipt also recently added a feature that lets customers sort products by nearly 20 dietary labels and save their preferences. The new developments come at a time when e-commerce platforms and retailers are looking to ramp up their personalized offerings.  

Shipt has helped power triple-digit growth for parent company Target during the pandemic, but its expansion with other retailers has often been overshadowed by Instacart and now fast-growing upstarts like DoorDash and Uber. Caruso said Shipt is focused on creating a diverse selection of retailers for users in markets across the country. It typically looks to have a general merchandiser like Costco or Meijer, a "beloved" regional grocer and nationally known companies like Petco and Bed Bath & Beyond on its marketplace.

In the past year, Shipt added more than 30 retail partners and tripled its personal shopper ranks, Caruso said.

"When we've got a very diverse marketplace that covers not just grocery and household essentials, but all of the shopping needs, that's when we have a very robust marketplace and that's good for our customers," Caruso said.

Shipt, which offers delivery as fast as one hour, is relying on its retail partners to determine its speed and fulfillment capabilities. "It is developing the right fulfillment strategy that meets the needs of the retailer, not what we think is best," Caruso said, noting that Shipt offers its own marketplace, delivery-only fulfillment and full integration into retailers' sites.

"We see ourselves as an extension of their brand, not a replacement for it," Caruso said. "We want to be a partner to retailers. We never want to be a retailer or a standalone marketplace."


Catherine Douglas Moran, Khareem Sudlow