Target Grows Online Sales 20%, Outlines Order Ahead Expansion

The retailer plans to expand its Order Ahead and Drive Up services to include adult beverages and additional grocery items.

Need to Know

  • Target’s recent Q4 and full-year 2019 earnings reveal major wins for the retailer thanks to aggressive omnichannel transformations.
  • Q4 comparable sales grew by 1.5% while comparable digital sales grew by 20%.
  • Same-day services (Order Pick Up, Drive Up and Shipt) accounted for more than 80% of Target’s Q4 comparable digital sales growth. 
  • The retailer also outlined strategic omnichannel growth initiatives focusing on the addition of fresh grocery and adult beverages to its Drive Up and Order Pickup services, changes to its small-format and remodel programs, and updates to its supply chain transformation.

Analysis

Target’s Q4 earnings report reveals why the retailer’s recent entry to the list of top-10 US e-commerce retailers is justified—an omnichannel transformation that focuses on digital growth and elevated customer experiences.

“The strategic investments we’ve made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest,” Brian Cornell, Chairman and CEO of Target, said in the release. 

“As we look ahead to 2020 and beyond, we are well-positioned to build on this strong foundation to further differentiate Target and drive long-term, profitable growth,” he added. 

Target’s long-term strategic investments have paid off, In 2019, Target’s same-day services grew more than 90%, accounting for nearly three-quarters of the Company’s comparable digital sales growth.

The retailer’s same-day services like Order Pick Up, Drive Up and Shipt accounted for more than 80% of its fourth-quarter comparable digital sales growth. Aware of the impact, Target’s 2020 strategy involves expanding on the offering by adding fresh grocery and adult beverages to both its Drive Up and Order Pickup services, adding new milestones for its small-format programs, and updates to its supply chain transformation. 

“As we look to 2020, we’ll continue to elevate our popular same-day services and expand our ambitious small-format and remodel programs to create an even easier and more convenient experience that inspires our millions of guests to keep shopping Target in new and different ways,” Cornell said. 

Competition from retailers Walmart and Amazon have companies like Target looking for advantages anywhere they can find them. It’s clear that Targets has its sights set on the correct target as Fourth-quarter sales reflected digital sales growth of 20%. Omnichannel-focused plans that merge offline and online experiences just might be the key to giants like Amazon in the retailer’s targets.