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The shortlist has been unveiled for the IGD Awards 2018, the annual event celebrating the best of the food and grocery industry.

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Target has announced the companies which are participating in the third round of its retail accelerator partnership with Techstars.

Providing mentorship, business advice and access to investors

Target initially partnered with Techstars, a leading startup accelerator in 2016. The retailer has invited 10 companies to participate in the 13-week program this year which will provide the startups with the opportunity to meet with more than 100 mentors within Target. They will provide the companies with advice and insight into how to bring their ideas or products to market and align with the retailer’s goals. In the final month, the companies will participate in a ‘Demo Day’. This will help the startups to pitch their ideas and start meeting potential investors. They will also have access to Techstars’ network of entrepreneurs, mentors and investors.

Source: Target

Food waste, artificial intelligence and selfie rewards

The companies participating this year include Clicktivated, Cooklist, Flashfood, ProcessBolt, Runerra, Satisfi Labs, Sozie, Staffless, To the Market and Type W. They are focused on areas including food waste, artificial intelligence and rewarding shoppers for fitting room selfies. Several previous participating companies continue to work with Target. These include Inspectorio, a startup that set out to reinvent the retail inspection process, and BYBE, a company which enables Target to include adult beverage rebates in Cartwheel. It also continues to work with Local Crate, a meal kit company which has its products in around 200 Target stores.

Bringing a startup mentality into larger organisations

Tapping into the startup community has become a priority for companies in the grocery sector. Walmart, Tesco and Albert Heijn have all initiated programs to work with small, innovative companies. Most major manufacturers, including Unilever, Coca-Cola and Chobani have also established innovation labs. In addition to bringing new technologies and products to the supporting businesses, the larger companies also look to learn from their ways of working, including their agility, speed to market and flat organisational structures.

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Walmart testing 3D virtual online shopping with Back to School

Following the launch of the new earlier this year, the retailer is testing a new experience that enables customers to take a virtual shopping tour of a curated apartment.

We look at the initiatives which Walmart and Target have put in place as they seek to win this key seasonal event.

Walmart’s digital approach

Following the integration of its ‘TeachersLists’ resource into a dedicated online destination, School Supplies List, last year, Walmart is expanding this to its app. This enables parents to search and shop for their child’s actual list and use the app to locate the store aisle the time is in.

The retailer is also helping college students to shop for their dorm by launching ‘Buy the Room’. This enables customers to add a group of items to their shopping cart to shop a complete dorm look. Walmart will launch with nine curated collections that each feature up to 20 of the most sought-after items college students search for and purchase.

The retailer has also launched a ‘Teacher Shop’ within and a dedicated section in more than 2,100 stores. This features classroom supplies including stickers, reward charts and dry erase boards. Walmart has also doubled the range of products available through its online grocery pickup service. It is also offering home delivery in selected markets as part of its new ecommerce service which started to roll-out earlier this year.

Source: Walmart

Target plays to brand strengths with style and value focus

At Target, the focus is on emphasising the retailer’s style credentials. It is showcasing dorm essentials from its new private brands, Opalhouse, Project 62 and Heyday. As part of its efforts to curate ranges, it has launched a 360-degree shoppable dorm room experience, enabling customers to shop each look. New kids products have also been launched within its Cat & Jack and Up & Up private brands.

Savings for students and teachers

Target is also optimising its range of ecommerce programs. A new College Order Pickup service enables shoppers to place their orders on and pick them up when they move-in at a Target store near to their campus. Customers using this service will receive a 15% discount. The retailer is also offering teachers a 15% saving on selected classroom supplies, in-store and online.

$83bn opportunity

The National Retail Federation forecasts that back to school and college spending will reach $82.8bn in the US this year. College spending is expected to be at its highest level ever, and back-to-school will be one of the three highest years on record. The highest spending is expected on clothing, followed by electronics, shoes and school supplies. Department stores and online retailers are forecast to be the most popular destinations for these purchases.

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Having laid out an ambitious plan to roll-out its same-day delivery and store pickup services across the US this year, we review Target’s progress to date.

Four key services being expanded

As part of its strategic focus on being ‘America’s easiest place to shop’, Target is rolling-out four grocery ecommerce related services this year. These include same-day delivery via Shipt, Drive Up, Restock and from-store delivery in selected cities. Having made significant progress over the first six months of the year, these services are being extended across the Midwest and Southeast; Chicago will be the first city to offer all four of the retailer’s delivery and pickup options.

Source: IGD Research

Shipt on track to hit 65% US households

Target acquired Shipt, the on-demand, membership-based delivery platform, last year. Available in more than 135 markets, it is currently focusing on the same-day delivery of groceries, essentials, home, and electronics. It remains on-track to offer the service across the US in time for the holidays, reaching 65% of households. By the end of 2019, Target expects to offer all major product categories through the service.

1,000 stores to offer Drive Up service

Drive Up is currently available in more than 600 stores across 20 states. This service allows customers to place orders via the Target app, then have their items brought out to their cars. Orders arrive within two minutes of when a customer pulls into the store car park. Almost 1,000 Target stores will offer the service by the holiday season.

Stores in 60 markets fulfilling Target Restock orders

Target also continues to push ahead with the national expansion of Target Restock. This is a next-day delivery service of household essential products which enables shoppers to fill a box (up to 45 pounds) for $2.99 per box. The service is currently available to around 75% of US households, with shipments coming from Target stores in more than 60 markets.

Delivery from store expanded to additional cities

Target has also expanded its delivery from store service to additional markets having initially launched it in New York. The service is currently available in almost 60 stores across New York, Boston, Chicago, San Francisco and Washington D.C. Customers using this service can choose to have their purchases delivered the same-day during a two-hour for a flat fee of $7.

Stores as distribution hubs

The launch and roll-out of these services complement Target’s existing free two-day shipping program for most items on Providing customers with more flexible and convenient options has been a key part of the retailer’s focus this year. This has seen Target reposition its stores as distribution hubs, with around two-thirds of online orders fulfilled by store-level inventory. However, this has required Target to reengineer its supply chain to flow products to stores in single items, cases and pallets. Having put new processes in place at a distribution centre in the north east, the retailer plans to equip additional sites with this capability.

Stewart Samuel, Program Director, IGD Canada: based in Canada, Stewart heads up all of IGD's research and coverage on Target. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region's markets, channels and retailers. Follow Stewart on Twitter: @Stewart_IGD

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