Target Rolling Out New Online Fulfillment Initiatives - Twice

Target Ups Its Online Fulfillment Game

And posts 35% spike in Q4 profits
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Target cartons on conveyor belt

Target announced a series of online and in-store initiatives in conjunction with the release of its fourth-quarter earnings results.

On the digital front, the company said it increased the number of online products available for free two-day shipping to the hundreds of thousands. Orders must hit a $35 minimum threshold or be charged to Target’s private-label credit card to qualify.

The No. 2 discount chain has also expanded Drive Up, its order-online- pick-up-at-curbside program to nearly 1,000 of its 1,822 stores. Target began testing the service last fall in its hometown market of Minneapolis-St. Paul, and immediately saw a 10 percent increase in week-over-week orders.

The curbside concept, first deployed by Sears, has proven especially popular for tech products like TVs, which are among the most-ordered items for Drive Up, the retailer said.

See: Sears Offers Curbside Pickup For Online Items

Also in expansion mode is Target.com’s same-day delivery service. Announced last year, the program is already available at more than 440 stores across the Southwest and Twin Cities markets, and is expected to reach most Target stores and all major markets by the holiday season.

The service covers electronics, home goods, groceries and household essentials, and is provided by recently acquired personal-shopper startup Shipt.

See: Target Acquiring Next-Day Delivery Capability With Purchase Of Shipt

Also in the pipeline is a next-day, $4.99 flat-fee home delivery service for household essentials called Target Restock, which is expanding to 30 new cities, and a home delivery service for items purchased in urban stores. The latter is presently available in four New York City locations, and is being rolled out to select stores in Boston, Chicago, San Francisco, Washington and throughout New York.

Other in-store initiatives include a pay raise for sales associates — to a minimum $12 an hour this year en route to $15 by the end of 2020 — to ensure “an elevated experience for guests,” and a tripling of its store remodeling effort to more than 300 locations this year, including “sizeable investments” in about 30 new small-format stores in key metro areas like Chicago, Los Angeles and New York.

“We’re making Target America’s easiest place to shop,” said chairman/CEO Brian Cornell. “That means blending the best of our physical and digital assets to create new experiences for our guests and reimagining our network of stores into hubs for commerce and community — inspiring showrooms, service centers and neighborhood-based fulfillment centers.”

Meanwhile, Target posted a 10 percent increase in net sales, to $22.8 billion, for the fourth quarter ended Feb. 3, which included one more week than the year-ago period. Comp sales were up 3.6 percent, and comparable online sales grew 29 percent, while net earnings soared 34.7 percent, to $1.1 billion, thanks to cost-saving initiatives and benefits from the Trump administration’s new tax legislation.

“Our fourth-quarter results demonstrate the power of the significant investments we’ve made in our team and our business throughout 2017,” Cornell said.   

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