Shipt Sees Same-Day Delivery Opportunity in Business Travelers

Shipt is seizing on business travelers’ demand for familiarity to drive same-day delivery adoption.

In an interview with PYMNTS, Alex Ross, vice president of business development at the Target-owned aggregator that provides on-demand delivery of groceries, daily essentials and other items, said the company’s new hospitality partnerships, announced earlier this month, target travelers’ desire to feel some sense of their usual day-to-day routine.

“Through these new hospitality partnerships, we’ve found that more traveling workers and extended stay guests seek the same stability of routine shopping and reliability of last-minute shopping solutions … whether they are close to home or farther than usual,” Ross said. “For example, customers may have a coffee preference or dietary need first thing in the morning. With Shipt, they can now access those items without having to leave their room.”

These partnerships with InTown Suites, Mainsail, RCI and Stay Sojo, which extend to more than 1,000 locations, offer free trial Shipt memberships to those staying at the hospitality companies’ hotels, resorts and housing units.

Regarding the opportunity that business travel presents, Ross noted that these travels are “still seeking the day-to-day structure they would have at home,” presenting an opportunity to drive adoption by making it easy for them to get items they are familiar with in an environment that they might not yet be comfortable navigating.

Certainly, business travel represents a large and growing opportunity. Last month, American Express Global Business Travel (Amex GBT) leaders noted that the company expects total business travel spending to grow by 24% in 2023 to reach over a trillion dollars, and last year, Amex GBT’s travel revenue increased 224%.

Additionally, consumers continue to travel for leisure purposes, even if some are cutting back this year amid inflation. Research from PYMNTS’ study “New Reality Check: The Paycheck-to-Paycheck Report — The Economic Outlook And Sentiment Edition,” created in collaboration with LendingClub, which draws from a survey of nearly 4,000 U.S. consumers, reveals that 35% said they will incur leisure travel expenses in 2023, while 9% of those surveyed said they did so in 2022 but would not in 2023.

Now, one of the key challenges will be driving adoption.

“With any new partnership there is a learning period where we work to educate customers on the best way to use our platform,” Ross said. “All our hospitality partners have worked with us to streamline the process for their guests with attention to accessibility and ease in mind.”

Same-day delivery is becoming more popular, but it is not yet the norm. As of last year, per research from PYMNTS’ study “ConnectedEconomy™ Monthly Report: The Rise Of The Smart Home,” which drew from a survey of nearly 2,700 U.S. consumers, one in three shoppers had ordered products online from a same-day delivery website such as Shipt in the previous month, and of those, more than two-thirds did so at least once a week.

Ross expects that, over the next year, as adoption grows, the company will expand these hospitality partnerships, reinforcing this use case for same-day delivery.

“We … hope to be growing this area of our business with new partners and increased capability for all,” Ross said.