Target aims at online rivals with baby goods subscription plan
Sept 25 (Reuters) - Target Corp will launch a free service on Wednesday that lets shoppers set up recurring deliveries of bulky baby goods, a move that mimics Amazon.com Inc and is aimed at attracting more moms.
Target has a battle ahead since it is not the first to offer such delivery, and for now is only selling 150 items such as diapers, baby wipes and formula.
"There are certainly other options in the marketplace and it's one that they expect Target to have," Casey Carl, Target's president of multichannel, said in an interview.
After shoppers told Target they wanted a recurring delivery service, the retailer decided to start with baby products since new mothers are an important group of customers for the retailer. It could expand into more categories, based on demand.
The U.S. birthrate has declined in recent years, intensifying competition among mass merchants such as Target, specialty shops led by Toys R Us Inc's Babies R Us and Bed Bath & Beyond Inc's buybuy BABY as well as websites including Amazon.com and its Diapers.com unit.
Target is the largest bricks-and-mortar retailer to offer a service dedicated to baby goods. For now, Target Subscriptions will not offer baby food. Most of its orders will be sent via United Parcel Service Inc.
Diapers.com has let shoppers sign up for automatic shipping for recurring orders since September 2012. The number of customers using the feature has been growing at an average of 30 percent month over month, the company said.
Some of its most popular items for auto shipping are diapers, formula, wipes and baby food, Diapers.com said.
Wal-Mart Stores Inc's Walmart.com has been testing a subscription service called Goodies since November that sends boxes of snacks starting at $7 per month, but would not say how many subscribers it has.
Amazon Prime, which debuted in February 2005, offers express shipping on 15 million items for members who pay a $79 annual fee, and includes free streaming of movies and television shows. Amazon Mom and Amazon Student, which have specialized offers and discounts, are free for the first few months, then cost $79 and $39 per year, respectively. Amazon did not disclose membership numbers but said it has millions of Prime members.
Minneapolis-based Target would not discuss sales or profit goals for its venture, which has been tested by employees. Households with children spend about 20 percent more each year at Target than those without children, the chain told Reuters when it began testing an updated baby section in 10 stores this year.
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