Target Announces $4 Billion Investment Strategy
MINNEAPOLIS, MN - I must admit there has yet to be a time where I've gone into Target and only bought what I came for. This is not an accidental event for those in the trade who invest in creating a retail landscape of value that not only fills the needs of consumers, but informs them of what they need. Now, the company is about to make it a lot harder for shoppers to walk out without a full cart, as it has announced a plan to implement $4 billion investments annually for the next several years in the expansion of its operations. The investments will go toward new store openings, remodels, enhanced fulfillment services, and the expansion of its fresh grocery category.
"2020 was a record-breaking year thanks to the work of our team and their commitment to serving our guests amidst unprecedented demand. As we head into 2021, we are building on the aspects of our differentiated model that make Target the preferred one-stop-shop for millions of guests," said Michael Fiddelke, Chief Financial Officer. "The bold investments planned for the next few years will scale key capabilities across stores, fulfillment, and supply chain to drive deeper engagement with new and loyal guests, continued market share gains, and long-term, profitable growth."
As the pandemic drove consumers to embrace same-day delivery services and online ordering, Target is looking to make the fulfillment options even easier and more convenient in 2021. According to a release from the company, after the enthusiasm of consumers toward the addition of fresh, refrigerated, and frozen food to its Drive Up and Order Pickup, Target will increase the assortment of fresh and frozen food available for pickup.
Technological improvements will also be implemented to offer Drive Up shoppers a more personalized experience through the Target app. This includes informing associates where to place orders within shoppers' vehicles and authorizing different guests, such as family members, to pick up orders.
In addition to the expansion of its online services, Target plans on accelerating store openings, planning to open 30–40 new stores each year to meet community demand. The retailer will be opening more small-format stores to reach new guests in urban centers and near college campuses as well. To accommodate dense suburban areas, the retailer will be filling gaps with its moderate-sized stores to fit the needs of the surrounding areas.
Target is expecting to quicken its store remodel program as well and is planning on completing close to 150 stores in time for the holiday season, with plans to remodel over 200 stores by the beginning of 2022. New designs will focus on convenience and safety, and will implement more contactless features, updates, and same-day fulfillment.
To enable Target to expand its fulfillment operation capacity, the company is testing new facilities in Minneapolis, which will also be a part of the $4 billion investment. Referred to as the sortation center, the operation will be the first of five expected to open in 2021.
In addition to the sortation center, Target also expects to open two new distribution centers this year—one in Delaware and the other in Chicago. Two more are expected to open in 2022 to support the east and west coast demand.
How will this new investment position Target for further growth in the retail sector? Stick with AndNowUKnow for the latest.