Target Sees Digital Sales Spike 141%

The retailer's investment in drive up, pick up, and delivery services has resulted in increased first quarter sales.

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Need to Know 

  • Despite being hit by the pandemic in the first quarter, Target has seen sales rise 10.8% 
  • Target’s digital sales alone have grown 141% 
  • The major retailer can thank its new-and-improved same-day services (pick up, drive up, and Shipt) for giving customers online access to household goods 

Analysis

In a stunning first quarter, Target has seen sales rise 10.8%, with digital sales alone rising 141%. 

At the onset of the pandemic, Target saw increased demand for food and household essentials, as many customers stockpiled goods, and online sales prospered due to customers placing orders online more than ever before. 

However, due to the retailer’s flexibility, and despite the loss of over half of the company’s operating income, Target was able to earn $19.6 million in total revenue in the first quarter, up 11.3% from last year.

A big source of the success has been Target’s same-day services: pick up, drive up, and Shipt, which grew 278% this quarter. Pick up and drive up allow customers to order online and collect their goods at the store nearest them, while Shipt delivers to their home. 

Target said sales through its curbside drive-up option alone increased 1,000% in April and more than 2 million customers tested out the feature for the first time.

“Throughout the first quarter, our team and guests faced unprecedented challenges arising from the spread of COVID-19… With our stores at the center of our strategy, and a significant investment in the safety of our team and guests, our operations had the agility and flexibility needed to meet the changing needs of our business,” said Brian Cornell, chairman and chief executive officer of Target Corporation, in a press release

“With the dedication of our team, the benefit of a sustainable business model and a strong balance sheet, we are confident Target will emerge from this crisis an even stronger retailer, with higher affinity and trust from our guests.”

There is no wonder that GlobalData Managing Director Neil Saunders described Target as one of the “beneficiaries of the pandemic.”

The beloved retailer’s 2019 digital transformation is likely the reason for success. Since bringing IT and software development in-house and its acquisition of Shipt, Target was set up to better meet customer’s digital needs — and this pandemic is proving the investments were worth it.

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