Shipt identified markups, fees, and tips as a key driver of churn. Since tips and some fees were unavoidable, they strategically focused on eliminating markups—the one component of the cost structure they could directly control—to create a powerful competitive advantage.
To ensure customer experience is a priority across the entire organization, Shipt integrated customer sentiment metrics directly into its company-wide OKRs. This operationalizes their commitment to being customer-centric, making CX a shared responsibility and a key measure of strategic success for all teams.
By removing markups for premium members, Shipt's traditional Customer Lifetime Value (CLV) calculation became obsolete for this segment. This forced the company to fundamentally rethink how it defines and measures the value of its most engaged customers beyond per-order revenue.
Rather than a universal price adjustment that would upend its business model, Shipt tested its "no markups" initiative within its Target Circle 360 membership. This limited financial exposure, targeted high-value customers, and created a powerful incentive for membership renewal and engagement.
After getting executive buy-in for a major pricing change, Shipt's biggest challenge was marketing. They had to simplify a complex message about eliminating markups for a specific member segment, make it compelling, and navigate legal requirements, which required extensive message testing and collaboration.