Competition between some of the world's largest retailers, Amazon (AMZN), Walmart (WMT) and Target (TGT), has each one reaching for big changes to get ahead or stay competitive. The first retailer to bring something new to the market set the bar for the others.
Amazon was the first to launch its app StyleSnap in 2020 where customers could take a picture using the Amazon App or go through its website to find the product or one similar. Walmart followed suit by launching its A.I. tool that works similar to Amazon’s StyleSnap called TrendGetter in 2022. Walmart’s App essentially helps shoppers find products by taking a picture of it and the artificial intelligence does the rest.
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Target hasn’t jumped on the use of AI for shopping, but maybe they haven’t because customers may still prefer to go into the store, walk around sipping a Starbucks coffee and actually touching all the soft fuzzy pillows instead of taking a picture of a product they want. Whatever the reason, Target hasn’t gotten into using AI for its customers, but it doesn’t appear to have hampered it in its competition yet.
Target Brings Higher Delivery Service Options
Target hasn’t launched an AI shopper like Walmart and Amazon, but it is expanding its level of competition in the market and increasing its delivery capacity for customers. Target started its pilot of Sortation centers in 2020 in its corporate location in Minneapolis. The center was a test to see how Target could increase efficiency and speed of delivery of orders to its customers. Target has since expanded the Sortation centers to include Texas, Colorado, Illinois, Georgia and Pennsylvania with more plans on expansion.
Target bought Shipt in 2017, a delivery service that focuses on same day delivery, according to Target’s website. Target announced that it would be expanding its next-day delivery capabilities with its use of the Sortation centers.
“Now more than ever, our guests rely on us to deliver their everyday essentials and Target favorites when they want and need them most,” says Target’s Chief Global Supply Chain & Logistics Officer, Gretchen McCarthy. McCarthy continues, “Through our sortation centers and Target Last Mile Delivery capabilities, we’re able to move faster and with more precision — while controlling costs and expanding our network capacity — for years to come.”
Target uses its Sortation center to get the deliveries ready and then uses its subsidiary Shipt to deliver when it can. Otherwise, it uses a third-party delivery service, whichever has the lowest possible delivery price.
“We learned that we had to operate differently,” says Doire Perot, Target’s operation director for its Minneapolis Sortation Center. “This type of building, the type of next-day delivery capabilities that we can offer to our guests and team, it was going to take a different operating model across every team involved. There are three high-level goals that existed on day one and still hold true today: decreasing costs, increasing speed and increasing last-mile capacity,” says Doire. “Those three things are going to be the tune for the next several years as we continue bringing that vision to life.”
Target said that using its Sortation centers have had clear proven results that prove it is moving in the right direction. Target has seen an increase of 150% for next day orders and is expecting to deliver 50 million packages in 2023.
Target’s Treats Customers to First Rate Service
While Target isn’t offering the use of artificial intelligence to its customers for enhanced shopping experiences, it is offering something that some may find much more valuable. The Target stores that have a Starbucks located inside added a new service that takes convenience to the next level. Customers can pick up a curbside order and also get their Starbucks order handed to them as well.
Fast, efficient and inexpensive delivery services became more vital during the pandemic, but since then, consumers have experienced top rate delivery service for items that they used to have to spend time, money and energy to get. Now customers know what kind of service can be delivered, and the front door delivery is expected to expand.
