US retailer Target Corporation recently announced its plan to invest nearly $4 billion annually in the next several years to continue scaling capabilities across its retail platform. Building on years of sales growth and a record 2020 financial performance, Target will accelerate new store openings and store remodelling, enhance fulfillment services and strengthen its supply chain.
“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 of the company in a press release.
“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,” he added.
Technology improvements will also offer Drive Up guests a more personalized experience in the Target app. This includes informing team members where to place the order in their vehicle or authorizing a different guest, such as a family member, to pick up the order.
Following 30 store openings in 2020, including adding a record 29 new small-format stores in a single year, Target plans to accelerate the pace and open 30-40 new stores each year to meet community needs in urban centers, college campuses and dense suburban cities across the country.
In urban centres like New York City, Los Angeles and Portland, Target will open more small-format stores to reach new consumers. In dense suburban areas surrounding cities such as Denver or Brooklyn, Target has identified sites for new mid-size stores.
Across college campuses, including the University of Georgia and University of Michigan, Target will open new small-format stores to introduce its unique shopping experience.
Target expects to accelerate its store remodelling programme this year and complete approximately 150 in time for the holiday season, with plans to remodel more than 200 stores a year beginning in 2022. The future store design will focus on safety and ease, with additional contactless features, updates that facilitate same-day fulfillment and more room for social distancing.
To add capacity to Target’s fulfillment operation and further scale its stores-as-hubs model, the company is testing a new type of facility in Minneapolis called a sortation center and expects to open five more in 2021.
The company is also making investments in its supply chain replenishment capacity to support stores’ continued growth well into the future. This year, Target expects to open two distribution centres, one in Delaware and one in Chicago. Two more are planned in 2022 to support the east and west coastal areas.