Target Corp. is including more shops with drive-up and delivery capabilities.
Target Corp. is rapidly adapting its real estate to stay up to date with growing consumer need for in-store pickups and city areas.
The Minneapolis merchant is on track to include satisfaction and online-order pickup abilities to 1,100 shops by 2020 and to increase fivefold its small, urban-format stores next year, the business stated.
In the second quarter, those initiatives– part of a strategy introduced in 2015 to basically re-imagine the company to adjust to altering consumer preferences– drove the largest similar sales boost because 2005 and the greatest traffic development given that the company started tracking it 12 years earlier.
“We needed to make some strong investments,” President Brian Cornell said in an earnings call. “Each one of the key elements is working ahead of the schedule.”
Target remodeled 113 stores and opened six metropolitan, small-store formats in the 2nd quarter. In July, 258 of the company’s more than 1,800 stores remained in some stage of restoration.
Target invested more than $1 billion on those remodels and is slated to spend $3.5 billion this year on shop improvements developed to bolster its pickup and same-day delivery services, it stated.
By 2020, the business anticipates to have actually remodeled more than 1,100 shops as it revamps its digital channel and supply chain. By next year, it prepares to operate more than 130 small format shops, it stated last year. It now runs 26.
“Our new little formats continue to impress and are driving productivity from a sales standpoint that are beyond our expectations,” Cornell said.
The business now offers pickup services at more than 800 stores throughout the nation, up from 50 at the start of the year. Its Shipt shipment and individual shopping service is now readily available in 58 urban shops in 5 markets and is set for further growth, Cornell stated.
Walmart, which offers comparable services, also reported a record quarter last week.
Eric Carlton, executive vice president at industrial brokerage Collier’s International, called it the “Amazon result.”
“All these retailers are being required to adjust and compete,” Carlton stated. “Satisfaction centers in stores. Pickup lanes in the parking area. Same-day shipment. Any method they can take on Amazon.”
Target initially revealed its $7 billion remodeling in February 2017. At the time, Cornell called the financial investment “a long-term view of years and decades, not months and quarters.”
The company reported income of $17.8 billion for the quarter. Digital sales grew 40 percent.