Target launches its next level of competition against Amazon and Walmart.
Competition between some of the world’s largest retailers, Amazon (AMZN) – Get a free reportwalmart (WMT) – Get a free reportand objective (TGT) – Get a free report, each looking for big changes to get ahead or stay competitive. The first retailer to bring something new to the market laid the foundation for the others.
Amazon was the first to launch its StyleSnap app in 2020 where customers could take a photo using the Amazon app or visit their website to find the product or a similar one. Walmart followed suit by launching its AI tool that works similarly to Amazon’s StyleSnap called TrendGetter in 2022. Walmart’s app essentially helps shoppers find products by taking a photo of them, and the AI does the rest.
Target hasn’t jumped on using AI to shop, but maybe they haven’t because customers still prefer to go to the store, walk in with a Starbucks coffee, and touch all the soft, fuzzy pillows instead of taking a photo. of a product they want. Whatever the reason, Target hasn’t gotten into using AI for its customers, but it still doesn’t seem to have hindered it in its competition.
Target brings better delivery service options
Target hasn’t launched an AI shopper like Walmart and Amazon, but it is widening its level of market competition and increasing its ability to deliver to customers. Target began its sort center pilot program in 2020 at its corporate location in Minneapolis. The center was a test to see how Target could increase the efficiency and speed of delivering orders to its customers. Since then, Target has expanded sorting centers to include Texas, Colorado, Illinois, Georgia and Pennsylvania with further expansion plans.
Target bought Shipt in 2017, a delivery service that focuses on same-day delivery, according to Target’s website. Target announced that it would expand its next-day delivery capabilities with the use of sortation centers.
“Now more than ever, our guests trust us to deliver their everyday essentials and Target favorites when they want and need them most,” says Gretchen McCarthy, Target’s director of global supply chain and logistics. McCarthy continues, “Through our sortation centers and Target Last Mile Delivery capabilities, we are able to move faster and more accurately, while controlling costs and expanding our network capacity, for years to come.”
Target uses its sorting center to prepare deliveries, and then uses its Shipt subsidiary to deliver when it can. Otherwise, use a third-party delivery service, the one with the lowest possible delivery price.
“We learned that we had to operate differently,” says Doire Perot, Target’s director of operations for its Minneapolis sorting center. “This type of building, the type of next-day delivery capabilities that we can offer our guests and team, was going to require a different operating model on each team involved. There are three high-level goals that were in place from day one and are still valid today: lower costs, increase speed, and increase last-mile capacity,” says Doire. “Those three things will be the tune for years to come as we continue to bring that vision to life.”
Target said that use of its sorting centers has had clear results that prove it’s moving in the right direction. Target has seen a 150% increase in overnight orders and expects to deliver 50 million packages by 2023.
Target’s treats customers with first class service
While Target doesn’t offer the use of artificial intelligence to its customers to improve shopping experiences, it does offer something that some may find far more valuable. Target stores that have a Starbucks located inside have added a new service that takes convenience to the next level. Customers can pick up an order curbside and also have their order delivered from Starbucks.
Fast, efficient, and affordable delivery services became more vital during the pandemic, but ever since, consumers have experienced premium delivery service for items they used to spend time, money, and energy to obtain. Now customers know what kind of service can be provided and home delivery is expected to expand.
