EXCLUSIVE: Shipt Keeps an Eye Toward Connection With Latest Tech Investments

Technology innovation is permeating the food retail industry, from machine learning and artificial intelligence (AI) to smarter apps and next-generation personalization. Target-owned delivery company Shipt has found a way to harness these technologies to make lasting connections with its customers, its shoppers and its retail partners.

During a conversation with Progressive Grocer at Shoptalk in Las Vegas, Shipt Chief Technology Officer Mike Calvo explained that one of the most important steps toward creating deeper connections with every type of customer is helping them forge meaningful relationships with Shipt shoppers. According to Calvo, the company has doubled down on that aspect of its offering.

“That’s really what differentiates us, that’s what motivates us and that’s why people appreciate our level of service,” Calvo explained. “What we’ve found is that when you get a shopper that understands you, that knows how to communicate with you, that knows what your preferences are, you want to have that same person shop for you again. We’ve made that easy.”

Not only does the customer benefit from the relationship and service they get, but shoppers also feel appreciated and have the opportunity to work for people that really value them. Calvo said anything that helps improve the connection and communication is something Shipt invests in, including a new custom chat feature that was rolled out to its platform last year. It helps ensure that reliable communication can go back and forth freely, while also prompting the shopper to reach out to the customer at the right time.

Search is another aspect of its tech stack that Shipt has been investing in recently. Shipt has found that, on average, its customers use its search capabilities between 15 and 20 times per shopping trip. The company wanted to remove friction from the experience, and drilling down on intent and creating a broader sense of context has allowed it to offer better recommendations and increase basket sizes.

By taking data about the customer and their searches, Shipt can now provide results that go beyond just the word a customer is looking for at the time. If a user is calling up items like ground beef and taco seasoning, for example, the company can now recommend pico de gallo.

“That’s something that we’ve really invested in and we’ve seen really significant improvements in terms of people adding things to their basket and having more things in their cart, which tells us that they’re finding more of the things that they need to find,” Calvo said.

Data has clearly been an important piece of the puzzle for Shipt, and it’s central to everything the company does, Calvo explained. “It’s really on us to make sure that we’re using that data for the best benefit of our customers, our shoppers and our retail partners,” he said

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Data can help inform customer recommendations and personalization of the platform experience, and it can also help empower shoppers to make informed decisions about the work they do for Shipt. As part of its effort-based compensation model, the company uses data to estimate how long a shop and delivery will take and give a relatively accurate pay estimate, making it easier for shoppers to make the right choice about what work is right for them.

“We can make all of the experiences, whether it’s finding the things on the customer-facing side that are related, or when the shopper is in the store and they see that an item is not on the shelf, we can give them really good suggestions on alternatives to suggest to the customer,” Calvo said.

As for its partners, Shipt has leaned in on making catalog data from grocers better and more accurate. Making sure that the images and metadata for a product are correct can help the company provide a better level of context on search.

In-app personalization is another important aspect of Shipt’s technology innovation, with an eye toward showing customers items that they’re likely to click on and be interested in, and also giving them meaningful offers and discounts. Shipt teams leveraged machine learning to restructure how it shows products that are on sale in the digital experience, and tailoring those suggestions has yielded a 13% increase in sale products being added to shoppers’ carts.

“Getting really effective and efficient at showing the right ads at the right time to the right people is a very worthwhile business,” Calvo said. “It’s something we’ve invested quite a lot in over the past few years.”

Shoptalk took place March 26-29 at the Mandalay Bay in Las Vegas.

Shipt is an independently operated, wholly owned subsidiary of Minneapolis-based Target Corp., which is No. 6 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America, with nearly 2,000 locations. Founded and based in Birmingham, Ala., Shipt also maintains an office in San Francisco.