Target is leveraging its network of physical stores across the US to compete with Amazon and Walmart in the fast delivery sector. By transforming these stores into mini-fulfillment centers, Target is able to fulfill 95% of its online orders, claiming this strategy is 40% cheaper than using traditional fulfillment centers. The retailer’s proximity to customers, with over 75% of Americans living within 10 miles of a Target store, plays a key role in their approach. Target also operates sortation centers that further streamline the distribution process, aiming to expand its network and enhance efficiency in delivery and sustainability.
- Target fulfills 95% of its online orders from its 2,000 stores, which act as mini-fulfillment centers.
- The retailer’s strategy is based on the proximity to customers, with over 75% of Americans living within 10 miles of a Target store.
- Target’s approach is considered 40% cheaper than routing orders through traditional fulfillment centers.
- Each store is equipped with designated shipping areas and pack stations for efficient order processing.
- Target operates sortation centers that process up to 45,000 packages daily during peak times.
- Sortation centers alleviate the strain on store employees and allow for high-volume shipping.
- Target uses Shipt, a delivery service it acquired in 2017, for some of its deliveries.
- Since opening its first sortation center in 2020, next-day deliveries have increased by over 150%.
- Target plans to expand its sortation center network to 15 by the end of 2026, investing $100 million.
- Target holds 1.8% of the e-commerce market share, against Walmart’s 6.8% and Amazon’s 37.6% in 2023.
- Walmart is also utilizing its stores for fulfillment but is incorporating automation in its strategy.
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