Target is making a $100 million bet on eCommerce by expanding its supply chain operations.
The retailer announced Wednesday (Feb. 22) it would increase the number of sortation facilities from nine to more than 15 by the end of 2026, a move that comes as other major retailers increase their investments in delivery service.
“Sortation centers and our last mile delivery capabilities support our guest experience and benefit our business — helping us deliver more efficiently and faster, at a lower cost while increasing our capacity,” Target said in a news release.
According to the release, Target has seen a 150% increase in the number of next-day deliveries since opening its first sortation center in 2020. Meanwhile, it projects its sortation centers will deliver 50 million packages this year, nearly double the amount from 2022.
The company had said last year it planned to double its investment in sortation centers, with CEO Brian Cornell noting that Target’s digital business had helped bring 90 million new customers to its store and website in the past three years.
Recent reporting by PYMNTS finds a number of retailers increasing their investment in delivery options. Walmart, for example, said last month it would expand its Private Fleet Development Program to beef up an eCommerce business that grew 17% in its most recent quarter
“Through this expanded pilot, associates in stores, distribution centers, fulfillment centers, and transportation offices within a 50-mile radius of a participating transportation office will be eligible to apply to the Associate-to-Driver program,” the company said in a news release.
“After they complete the 12-week training course and earn their CDLs, they have a coveted Walmart driving job ready to step into.”
And Amazon recently expanded its Buy With Prime program, which enables the company’s payments and fulfillment services at checkout, letting consumers use their Prime membership to get benefits like faster, no-cost delivery.
Target’s expansion plans follow November’s news that the retailer was remodeling its larger format stores.
These new store layouts are designed to give the company backroom fulfillment space that’s five times larger than past stores of comparable size, and help support a business that now sees its stores fulfill the vast majority of the company’s digital orders.
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