Target to open four regional 'sortation' centers for online orders

Target Corp. is attempting to shave time off its online delivery process by speeding up the fulfillment of e-commerce orders from stores.

In April 2021, Target publicized a pilot of a new sortation center in its home city of Minneapolis that streamlines the process of fulfilling digital orders from stores, which fulfill more than 95% of the discount giant’s online orders.

The pilot uses store associates to pick and pack digital orders. A Target-controlled truck then collects the packages and brings them to the center, where they are automatically sorted with proprietary technology for individual routes and immediate delivery at the neighborhood level.

Based on the successful results of the pilot, Target is expanding its sortation center concept. Starting in fall 2021, the retailer will open four new sortation centers in major markets across the country — including sites in Houston, Dallas, the Philadelphia area, and Lawrenceville, Georgia. All four facilities were built after the initial Minneapolis sortation center, which opened in 2020.

Under the sortation center model, when a customer places an order on Target.com, store teams pick and pack shipments, then sort them for delivery partners like Shipt to deliver to customer homes. Sortation centers are designed to make this process faster by retrieving packages as soon as store teams are finished packing and sorting, batching and routing them for delivery to local neighborhoods.

By removing the sorting process from store backrooms, Target saves time and space for store teams to fulfill additional orders, and because its sortation center technology pre-sorts and arranges packages for pickup, processing time is also reduced for delivery partners. The intended result is more efficiency in Target’s shipping processes and faster delivery for customers.

According to Target, the new sortation centers are part of a larger $4 billion annual investment in capabilities to support customer-facing services and experiences. Other areas that will be covered by this investment include opening up to 40 stores annually, store remodels, and an expanded fresh and frozen food pickup assortment. Additionally, following a successful initial trial in hundreds of stores, adult beverage pickup will be offered in 800 more stores in the next few months.

Technology improvements will also provide drive-up customers a more personalized experience in the Target app. This includes informing employees where to place the order in their vehicle or authorizing a different customer, such as a family member, to pick up the order.

Target is moving ahead with its sortation center model as reports are surfacing of Amazon planning to open brick-and-mortar department stores. While Amazon has not confirmed these reports, presumably physical department stores could serve as local fulfillment hubs for online orders of products such as apparel and consumer electronics, increasing the pressure on Target to maximize its own online delivery efficiency.

“As always, it’s all about delivering joy to our guests — making sure you can get what you need, when you need it, how you want it, now and for years to come,” Target said in a corporate blog post announcing the four new sortation centers.