Target Corp. or Target, a US-based retailer company, has announced on Tuesday, March 3, 2020, to add fresh food staples and alcohol items to same-day services and the services would be available at hundreds of its stores this year. The company will start launching the new services in the Twin Cities of Florida and Oregon in late March and then extended to most of its stores by the fiscal fourth quarter (Q4) of 2020.
Adding New Items to Same-Day Services
The Minneapolis-based retailer, Target announced that it would expand the fresh food service to nearly half of its stores by the holiday season and decided to test the pickup service to the convenience store-sized brick-and-mortar locations in some markets. The main motive of the new services was to provide quick services for the customers and encourage them to stay loyal to the company.
It was also a part of the company’s broader aim at tackling the slowdown of growth rate for online sales. As CNBC reported, “The company’s comparable digital sales were up 20% in the fiscal fourth quarter, down from the 31% growth it had in the prior quarter and the same period a year earlier.”
Same-day services have been key strategic developments for the growth of the retailer services providers, especially Target. At present, Target provides same-day services by using tools such as robots and machine learning besides the help of its subsidiary unit that facilitates delivery service, Shipt.
According to the CNBC report, “Target’s same-day services grew more than 90% and accounted for nearly three-quarters of the company’s comparable digital sales growth in 2019.” The report added, “Its same-day drive-up service had sales growth of more than 500% and its order pickup service had sales growth of about 50% in 2019.”
Expansion of the New Services
Target, after owning Shipt in 2017, has built-in advantages in the same-day delivery service especially the grocery items such as fruits and vegetables. Target’s CEO, Brian Cornell claimed that same-day services attracted loyalty from customers and explained that the customers continued to shop online for same-day services once they knew the experience of it. Cornell insisted, “When a customer tries a same-day service, 3 out of 4 times they’ll do it again within 3 months.”
Citing Target’s move aimed at strengthening its customer relationships, a consumer’s food-trend analyst, Phil Lempert described that providing quick services for customers encouraged them to visit stores more frequently. He added referring to Target’s adding of new food items, “There’s nothing more personal than food… There’s not a lot of emotion when you buy a T-shirt. There is a lot of emotion when you buy a steak.”
Target’s Chief Operating Officer, John Mulligan claimed that the company will set up about three dozen new small-format stores in 2020 for the expansion of its same-day services by focusing on the major tourist centers including Times Square, Disney World, and the Las Vegas strip. According to Target’s report, the small-format stores have contributed more than $1 billion in total sales in 2019.
Mulligan also mentioned that Target is planning to open an approximately 6,000 square foot store which will be roughly half the size of its smallest small-format stores this year and to sign a lease for the store to be launched in 2021.
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