Target may have cracked the code on delivering exceptional digital experiences.
Target has had a great week. Stocks are up and earnings look good. Digital sales are surging, with same day shipping accounting for 80% growth.
How did they get there?
According to Brian Cornell, CEO of Target, stores are at the center of fulfilling the digital experience. Using their retail locations, Target has managed to build a fulfillment model that delights customers while removing about 90% of the cost associated with same day shipping and successfully navigating the common same day delivery challenges. Watch out Amazon!
Target’s offering is an industry differentiator
According to a recent study, 70% of online shopper makes buying decisions based on delivery options, and now, even Amazon’s next-day delivery cannot hold up against Target’s on demand delivery service.
While most retailers would even aim for next day delivery, they are simply not there yet. So how did Target achieve success where many others haven’t even entered the race?
Deliver from store – With stores at its center, Target has managed to orchestrate the inventory, teams, and delivery, to achieve a successful digital experience.
Crowdsourced delivery platform – Target acquired Shipt, an online, same day shipping startup, for $550 million in cash in 2018 to offer same-day last mile delivery services in half of its stores in a year’s time.
What this means for other retailers
Today, while traditional brick and mortars are struggling with less foot traffic at the storefront, there is an opportunity to be had. With ship from store, click and collect and curbside pickup, businesses can leverage their retail footprint to boost revenue and delight customers. And with the right solutions in place, they will even make a profit.
Retailers need to look at technology platforms that utilize their existing infrastructure and integrates into supply chain solutions. They also need to ensure that they seamlessly connect to the crowd-sourced delivery fleets like Postmates and Doordash that make same day more achievable than traditional logistics providers.
Lastly, to catch up with the Targets and Amazons, time to market becomes critical. Retailers looking to deploy these solutions need to ensure they stay away from lengthy implementations that take too long and are too complex.
With delivering value and delighting customers as a strategic imperative for almost every retailer, same day ship-from-store will become a model of success.