Is Target becoming retail’s newest tech giant?
Target continues making strides in tech innovation as it seeks to keep pace with Amazon and Walmart.
Amazon, and more recently Walmart, have more or less taken positions as “tech giants.” In addition to selling products to consumers, they develop proprietary technology that enhances the shopping experience, improves enterprise operations, and in some cases is even offered to other retailers on a third-party provider basis.
Increasingly, Target is positioning itself as another member of the retail tech giant club. Here are a few examples of moves it is making:
Paid membership
One way the discounter is following Amazon and Walmart is by getting into the paid subscription membership game. Target plans to launch a paid membership program, called Target Circle 360, in April 2024.
The program will include unlimited free same-day delivery for orders from Target’s Shipt online delivery service over $35 in as little as one hour, two free-day shipping and access to Shipt Marketplace, which offers same-day delivery from more than 100 retailers nationwide.
Starting off, the program will offer a promotional price of $49 per year. The price will rise to $99 per year after the promotional period ends on May 18. Customers who have a Target Circle credit card will be able to pay the lower price of $49 per year beyond that date.
The new program is part of an overall upgrade of the retailer’s free loyalty program, Target Circle, which debuted in 2019 and has more than 100 million members.
Artificial intelligence (AI)
Like Amazon and Walmart, Target is also developing its own in-house artificial intelligence (AI) technology. These include AI-driven solutions that helped it forecast holiday product demand and keep items from going out of stock, as well as AI technology designed to help customers find the most personally relevant products and deals in its Target Circle loyalty program and on its e-commerce site.
Target also continues exploring employee- and customer-facing use cases for generative AI, and its Shipt delivery subsidiary recently introduced an AI-powered search function
Supply chain and delivery innovation
Target has long offered other retailers delivery services through its Shipt subsidiary, and Amazon and Walmart also both provide hosted delivery options. But the discounter is moving beyond simply supporting same- and next-day delivery of purchases with a variety of solutions and strategies.
In January, Shipt opened an innovation lab focused on advancing the future of shopping and delivery for all stakeholders. Technologies and areas where Shipt will conduct experiments and research include drone delivery and fulfillment, personalization, and immersive shopping experiences in virtual environments such as metaverse and gaming platforms.
One real-life example of Shipt providing an immersive shopping experience is a partnership with online gaming developer Voldex in summer 2023 that provided a back to school shopping immersion within Driving Empire, a racing experience available on the Roblox gaming platform.
On the supply chain side, Target is emulating Walmart and Amazon in using both strategy and technology to help maximize supply chain efficiency.
Target uses sortation centers, which streamline the process of fulfilling and delivering online orders by removing the sorting process from the backroom of stores, to aggregate order volume in a given market by acting as cross-dock facilities for items from 30 to 50 local stores.
Amazon and Walmart both consolidate stock for regional orders. In addition, like Walmart, Target takes advantage of its widespread store footprint by using stores as mini-fulfillment hubs, reducing the effort and expense of last-mile delivery.
