Target Corp. will open three new package-sorting centers during the next year — two in greater Chicago and one in the Denver area — to further its strategy of using stores to handle online orders.
The expansion will give Target nine of the mini-warehouses in the US, and more are planned for the coming years, according to a company statement Monday. The hubs, which receive goods from stores and forward them to customers, are designed to speed local deliveries and cut the shipping costs that typically make online orders less profitable than in-store sales.
For Target, fulfilling online orders from stores yields savings of about 40% per package compared with shipping them from big distribution centers. Using sorting hubs eases the burden even more, and surging digital sales since the start of the pandemic are pushing the retailer to add more of the facilities as it vies for online orders with the likes of Amazon.com Inc. and Walmart Inc.
