Archived The effect of Shipt on Team Members

[HRZone]

It looks like Red Card holders are getting 50% off of memberships to shipt.

Target is now getting to use these personal shoppers who are 1099 employees to deliver items to guest.

They aren't paying these drivers the cost of gas or wear and tear on their car. They don't have to pay for benefits. The person does get a little bit of pay but most dont understand they are paying out a lot of expenses an employer would normally cover.

Does shipt undercut SFS and OPU? Target has these 1099s find orders for guest and deliver them. It also would undercut those who participate in the drive up program.

I may be overthinking things but I know Amazon cuts a lot of their cost by using smartphone users rather than delivery drivers

 

[Times Up]

I think shipt will reduce sales at the store level, in some markets (more urban and/or upscale). However, shipt will recapture those 'lost' sales. They will be slightly more profitable to Target, because they don't have to factor in the cost to pick or deliver them.

Shipt will help Target compete with amazon for those consumers who want it NOW, but are too busy/lazy to get it themselves. Of course, this is on the merchandise that we have in common with Amazon. This may include fresh grocery items that Amazon hasn't quite figured out how to deliver just yet.

This could help pad Target's bottom line due to the reduction in labor costs. Assuming TMs don't get stuck treating the shipt shopper as a real Guest.

 

[IWishIKnew]

Items purchased through Shipt cost the customer a bit more than if they bought them through Target, so customers who notice that and/or care might still prefer normal channels, plus the annual fee, plus driver tip, etc.

Presumably the upcharge was how Shipt supported their costs and made a profit, so there's likely a little margin Target will get from that, in addition to siphoning away orders from itself and other stores. I would also assume that the store the shopper purchased from gets credit for those sales, similar to OPU or SFS.

 

[GoodyNN]

Shipt is partnered with Meijer here, and I just got another offer for half off the membership fee.

One thing that annoys me is that there's no apparent way to check prices etc without actually signing up and paying for the service. I was trying to figure out merch markup plus membership fees compared to my time and effort to do the shopping myself, and at what point it potentially becomes break-even. If they offered a 15 or 30 day free trial, I'd be all over that.

 

[IcePeasant]

I’m assuming this is a separate entity for target in terms of employees, geared to those who want convenience right at their door. I think it’ll add to the number of guests who rather choose a service such as Instacart versus actually going into their Target store and purchasing their daily/weekly groceries and necessities. I’m curious to see if the target deals still apply with those who order with Shipt, I’m assuming they don’t. From the One and only time I used InstaCart, I wasn’t able to accumulate points or get sale deals as well, so that could be an upside to encourage guests to get into the stores.


The personalized shopping employer I worked with charged $30+ For two pints of Ben and Jerry’s Ice Cream and I believe the target markup for us to make a profit was between 7-13%.

 

[SFSFun]

I think shipt will reduce sales at the store level

No it won't, because Shipt shoppers pay for everything at checkout just like everyone else. The sales are captured instantly.

 

[FlowTeamChick]

They aren't paying these drivers the cost of gas or wear and tear on their car. They don't have to pay for benefits.

This is part of the new gig economy. Those drivers, if they're smart about it and keep records, can claim a business expense for using their own vehicle. And tons of people don't have employer-paid benefits anymore, including lots of us who don't work the number of hours at Target to be eligible.
In my area, this kind of job is really liked by some who want to set their own schedules.

 

[Times Up]

This is part of the new gig economy. Those drivers, if they're smart about it and keep records, can claim a business expense for using their own vehicle. And tons of people don't have employer-paid benefits anymore, including lots of us who don't work the number of hours at Target to be eligible.
In my area, this kind of job is really liked by some who want to set their own schedules.

That's the plus side, the flexibility and being your own boss. However, after factoring in the wear/tear on your car, more spending on gas and oil changes, paying taxes (state, fed, and social security), you may not even be making minimum wage.

 

[TTGOz]

I might want to try Shipt as a part time or 2nd job gig while at Target.

there's this thing called InstaCart in my area too.

I think Shipt won't phase out SFS or OPU because it allows users to get Frozen goods delivered right to their doors, where with SFS you obviously can't ship frozen goods, and OPU you can't pick up frozen foods because they'll just melt and rot.

With Shipt, you place an order, someone picks it out the next day, and brings it to you literally right after, so you can get those frozen goods.

OPU and Shipt will be separate entities in their own respects, and both have their conveniences... it just depends on the person. I think a lot of people will opt to go in store and just buy their stuff themselves and be on their merry way. At least with OPU there's no extra cost for the convenience, whereas with Shipt you have to pay to get it delivered + tips.

I really like the business idea behind Shipt, I just might do it if it's kept local and I'm not expected to drive 30-45+ minutes on the freeway to get to a house in another city. I'd use that extra $$$ to get a new economy efficient car and/or to pay off my current car loan so I can get another car on payment.

 

[HRZone]

That's the plus side, the flexibility and being your own boss. However, after factoring in the wear/tear on your car, more spending on gas and oil changes, paying taxes (state, fed, and social security), you may not even be making minimum wage.

Exactly MIT just released a study the average uber driver makes 4.43 an hour after expenses.

I'm wondering if shipt is even worth it after expenses.

If you are spending your profits on gas and maintenance you might not ever afford a new car

 

[SmilesWI]

I wonder if there will be restrictions on Spot employees also working for Shipt. I also wonder how long it will take them to expand to smaller cities.

 

[SoCalMama]

Exactly MIT just released a study the average uber driver makes 4.43 an hour after expenses.

I'm wondering if shipt is even worth it after expenses.

If you are spending your profits on gas and maintenance you might not ever afford a new car

It’s kind of sad. It seems that uber is making millions. Poor people are just slaving away thinking that this is going to be their ticket out of poverty.

 

[LearningTree]

This is part of the new gig economy. Those drivers, if they're smart about it and keep records, can claim a business expense for using their own vehicle.

Yeah when I worked for instacart for a few months I saved all my gas receipts from the get go. I also kept track of how much mileage I spent. Made sure to include it all on my taxes.

 

[Times Up]

Yeah when I worked for instacart for a few months I saved all my gas receipts from the get go. I also kept track of how much mileage I spent. Made sure to include it all on my taxes.

By chance, did you track your hours worked to figure out your after tax hourly rate?

 

[LearningTree]

By chance, did you track your hours worked to figure out your after tax hourly rate?

No I didn't. Instacart wasn't my full time job. I just wanted something to pad my paycheck a little and also something that wouldn't require a commitment from me (schedule wise).

 

[SoCalMama]

If you are driving for instacart, uber, lyft or shipt, you need to be paying for a different type of auto insurance. You will not be covered in any accident if you have regular auto insurance. That's going to cut into your profit significantly.

 

[IWishIKnew]

I helped a Shipt shopper (Shipter? Shopter?) fetch something from the back today. Would never have known she was Shipt if she didn't have fancy insulated shopping bag and a green shirt.

In short, I'd say we won't much notice the presence of Shipt, except perhaps to increase sales, similar to SFS/OPU.

 

[REDcardJJ]

I helped a Shipt shopper (Shipter? Shopter?)

Shipt shopper

 

[Backroom81]

It’s kind of sad. It seems that uber is making millions. Poor people are just slaving away thinking that this is going to be their ticket out of poverty.

Companies like Uber, Lyft, etc is a disturbing look at a possible future economy. The business is modeled on passing virtually all the overhead costs to the workers; wear/tear on vehicles, payroll taxes, special liability insurance, etc.

I wonder how many of the drivers get sticker shock when they see how much they owe in self employment taxes (15.3% of adjusted income from schedule C).

 

[BoxCutter]

I wonder how many of the drivers get sticker shock when they see how much they owe in self employment taxes (15.3% of adjusted income from schedule C).

I wonder how many will shipt their pants.

 

[SFSFun]

Companies like Uber, Lyft, etc is a disturbing look at a possible future economy. The business is modeled on passing virtually all the overhead costs to the workers; wear/tear on vehicles, payroll taxes, special liability insurance, etc.

I wonder how many of the drivers get sticker shock when they see how much they owe in self employment taxes (15.3% of adjusted income from schedule C).

I've looked on drivers forums before out of curiosity and it's mind boggling how many of them rely on gig work as their only source of income and then get upset when the work dries up. It's not meant to be a full time job!

 

[Stocker]

Exactly MIT just released a study the average uber driver makes 4.43 an hour after expenses.

I'm wondering if shipt is even worth it after expenses.

If you are spending your profits on gas and maintenance you might not ever afford a new car

Read this article too, anyone thinking about going into uber or lyft should look at it.

 

[Spot the doge]

I wonder how many will shipt their pants.

 

[can't touch this]

My hot take on "the gig economy" is that it's a cost-saving scheme with a new trendy name to attract suckers.

My store has Shipt pamphlets sitting around everywhere but we've heard absolutely nothing about it from leadership, and I have yet to be asked about it by any guest. Aight then.

 

[FlowTeamChick]

I wonder how many of the drivers get sticker shock when they see how much they owe in self employment taxes (15.3% of adjusted income from schedule C).

Oh, for sure some of them will experience this. I was self-employed for a few years and could not believe how much I owed in taxes the first year I actually made some money. I was absolutely stunned at how much I owed because I didn't make all that much. And that was the beginning of the end of my self-employment. Between insurance and taxes, it was too much.