Having laid out an ambitious plan to roll-out its same-day delivery and store pickup services across the US this year, we review Target’s progress to date.
Four key services being expanded
As part of its strategic focus on being ‘America’s easiest place to shop’, Target is rolling-out four grocery ecommerce related services this year. These include same-day delivery via Shipt, Drive Up, Restock and from-store delivery in selected cities. Having made significant progress over the first six months of the year, these services are being extended across the Midwest and Southeast; Chicago will be the first city to offer all four of the retailer’s delivery and pickup options.
Source: IGD Research
Shipt on track to hit 65% US households
Target acquired Shipt, the on-demand, membership-based delivery platform, last year. Available in more than 135 markets, it is currently focusing on the same-day delivery of groceries, essentials, home, and electronics. It remains on-track to offer the service across the US in time for the holidays, reaching 65% of households. By the end of 2019, Target expects to offer all major product categories through the service.
1,000 stores to offer Drive Up service
Drive Up is currently available in more than 600 stores across 20 states. This service allows customers to place orders via the Target app, then have their items brought out to their cars. Orders arrive within two minutes of when a customer pulls into the store car park. Almost 1,000 Target stores will offer the service by the holiday season.
Stores in 60 markets fulfilling Target Restock orders
Target also continues to push ahead with the national expansion of Target Restock. This is a next-day delivery service of household essential products which enables shoppers to fill a box (up to 45 pounds) for $2.99 per box. The service is currently available to around 75% of US households, with shipments coming from Target stores in more than 60 markets.
Delivery from store expanded to additional cities
Target has also expanded its delivery from store service to additional markets having initially launched it in New York. The service is currently available in almost 60 stores across New York, Boston, Chicago, San Francisco and Washington D.C. Customers using this service can choose to have their purchases delivered the same-day during a two-hour for a flat fee of $7.
Stores as distribution hubs
The launch and roll-out of these services complement Target’s existing free two-day shipping program for most items on Target.com. Providing customers with more flexible and convenient options has been a key part of the retailer’s focus this year. This has seen Target reposition its stores as distribution hubs, with around two-thirds of online orders fulfilled by store-level inventory. However, this has required Target to reengineer its supply chain to flow products to stores in single items, cases and pallets. Having put new processes in place at a distribution centre in the north east, the retailer plans to equip additional sites with this capability.
Stewart Samuel, Program Director, IGD Canada: based in Canada, Stewart heads up all of IGD's research and coverage on Target. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region's markets, channels and retailers. Follow Stewart on Twitter: @Stewart_IGD
Retail Analysis weekly newsletter
Keep up-to-date with the latest retail developments shaping the industry. International and UK editions available.
Sign up for our newsletter »