Five ways Target is playing to win in ecommerce

Date : 03 November 2015

We review some of the latest ecommerce initiatives from Target.

1. Building a global audience

This month Target has launched its website globally. Having been one of the early ecommerce leaders in the US, the retailer has been investing significantly in this channel, with a strong focus on mobile and fulfilment. As the next phase of development the service has now been made available to shoppers in more than 200 countries and territories. The site also enables customers in the US to ship orders globally.

2. Driving traffic with free shipping

As part of its US holiday season strategy, Target is offering online shoppers free shipping and returns from this month through to December 25, with no minimum order size. This is in direct contrast with Walmart which requires customers to spend at least $50 to qualify for free shipping to their home. Earlier this year Target reduced its minimum spend threshold to $25 in order to qualify for free home shipping, but will be eliminating this for the holiday season, with the aim of driving additional online traffic.

3. Adding ship from store capabilities to 100 additional stores

The retailer is also expanding its ship from store program by 100 stores to 460. This has been an important program for Target in helping it to reduce fulfilment costs and improve delivery times. In a major enhancement to its website, shoppers can see an exact delivery date when they order products, rather than a delivery window.

4. Expanding the Curbside pick-up service

Having tested Curbside pick-up in 21 stores, the retailer is rolling this out to an additional 100 stores. Stores in Philadelphia, San Francisco, New York, New Jersey and Chicago will participate in the program which is operated by Curbside, a San Francisco based start-up.

Curbside allows consumers to shop directly from their mobile phones and pick up right in front of the store through the Curbside app. Store staff are notified when customers approach local stores using proprietary location technology. This service provides the retailer’s customers with more flexibility and convenience.

5. Broadening its partnership with Instacart

Having started to test the demand for online groceries with Instacart in the Minneapolis area in September, this is now being expanded to San Francisco. The service enables shoppers to buy grocery and other items from its stores, with delivery in as little as an hour. The expansion of this partnership comes as Target begins to overhaul its food and grocery offer. The retailer has appointed Anne Dament to lead this initiative which is focused on elevating the in-store experience for shoppers. This will see it re-position its food offer to more clearly highlight wellness ranges and be more locally relevant.

Meeting the needs of on-demand shoppers

These initiatives align with Target’s investment in improving its multichannel capabilities. The retailer has identified that shoppers become more valuable when they interact with the retailer in more than one channel. Over the next few years Target is anticipating annual growth in digital channel sales of around 40% as it deepens its digital, data and supply chain capabilities. While much of this will be driven by non-food categories, it recognises the importance of offering its shoppers more convenient options across its product portfolio.

Click here to view our insight deck which looks at how Target built the case for an aggressive multichannel strategy, placing its customers at the centre of its plans.

Stewart Samuel, Program Director, IGD Canada
Based in North America, Stewart heads up all of IGD's research and coverage on Target. He is also responsible for shaping IGD's research program across the region. Contact Stewart at [email protected] for further insight on the region.