In a move to ramp up e-commerce, retailer Target is investing $100 million to grow its network of sortation centers and speed up delivery times.
Key Details
- Target announced a $100-million investment into a growing network that will speed up delivery times for online orders.
- The retail giant expects to have 15 facilities for distribution completed by the beginning of 2026. It already has nine facilities ready to go.
- These new facilities also mean Target will hire additional staff—around 100 employees per sortation center.
- Despite a slowdown in sales and an excess in inventory, Target is betting on e-commerce to boost its growth.
- In addition to in-person sales, Target’s e-commerce has also slowed, though the numbers are compared to unusual highs during the pandemic.
Why it’s news
Other retail giants like Walmart and Home Depot have predicted that this year will be difficult for retailers as inflation continues to affect consumer budgets. Walmart expects a 2% to 2.5% sales growth, and Home Depot anticipates little to no growth.
Amid this predicted difficulty, Target is making a move to better establish its e-commerce trade. One of the ways it is looking to do this is through faster shipping, something online shoppers have come to expect.
Around 40% of Target customer packages are delivered the day after ordering, and Target is working on getting that percentage higher, CNBC reports.
During the beginning stages of Target’s e-commerce sales, the retailer turned its existing stores into miniature warehouses. Employees picked and packaged online orders. However, amid growing online sales, this method has become inefficient.
Target began testing delivery through Shipt, a third-party carrier that Target owns. Now, the company has sortation centers in Minnesota, Texas, Colorado, Illinois, Georgia, and Pennsylvania.
With the new system, Target’s supply chain and logistic officer Gretchen McCarthy says she anticipates Target can deliver around 50 million packages.