Target Pilots New Distribution Strategy

In an effort to restock stores faster, Target is experimenting with a new strategy to distribute products to its stores. The goal is to speed up its replenishment cycle to a matter of hours, rather than days, while reducing inventory at its brick-and-mortar stores, The Wall Street Journal reported.

The retailer is testing the new strategy at a warehouse in New Jersey. The facility is making smaller and more frequent shipments to stores, while using the same inventory supply to fill online orders as well.

Preston Mosier, Target’s senior vice president of global supply chain and logistics field operations, spoke at an industry event on Thursday (May 10). With the new strategy, he said the center could send stores “five bottles of shampoo, a case of ketchup, two polo shirts on hangers and a pallet of water, all prepared to move out directly to the sales floor. Or it could mean sending similar items prepared to move directly to a pack station to later go out to a guest in the neighborhood.”

The news comes a few months after Target announced in December that it had completed a $550 million cash acquisition of Shipt, an online same-day delivery platform that is growing in popularity.

In a press release at the time, the retailer said it will leverage its stores, and Shipt’s proprietary technology platform and community of shoppers, to bring same-day delivery to Target customers around the country. The purchase “significantly accelerates” its digital fulfillment efforts, and will bring same-day delivery to approximately half of its stores by the early part of next year.

The shipping option will be offered at the majority of Target’s stores and in all the major markets before the 2018 holiday season. Same-day delivery will apply to groceries, essentials, home, electronics and other products, and the discount retailer will expand the list of products included in the service over time. In fact, same-day delivery will include all major product categories at Target by the end of 2019.