Minneapolis — Target Corp. reported it plans to emphasize its focus on offering a differentiated guest shopping experience that will continue to position the company for long-term growth in 2023 at annual Financial Community Meeting in New York.
The company says it will invest $4 billion to $5 billion this year to expand its guest-centric services, operations network of stores and supply chain facilities, digital experiences and other capabilities. The retailer also shared more about its plans to advance its enterprise efficiency efforts, aimed at optimizing its operations after years of rapid growth.
“Investments in our shopping experience and frontline team have deepened our guests’ engagement with Target during the last few years, which is reflected in our continued traffic and sales growth,” said Michael Fiddelke, chief financial officer of Target. “This year, we’ll continue investing in our long-term strategic initiatives that propel our market share and profit growth over time. Coupled with our teams’ ongoing efforts to scale our business with greater simplicity, we are confident in our ongoing ability to meet the evolving needs of our guests and deliver value for our shareholders.”
This year, the retailer plans to launch or expand more than 10 owned brands, bringing thousands of new, differentiated products to guests. Additionally, it will appeal to value-conscious shoppers with more items starting at $3, $5, $10 and $15. In addition, the retailer will deepen its focus on offering clear, compelling promotions, introduce enhancements to its Target Circle loyalty program and debut a new advertising campaign that celebrates how it delivers affordable joy.
Beginning this spring, Target will expand its latest offering, Drive Up Returns, which allows guests to return most new, unopened items within 90 days of purchase from their car — for free. It says Drive Up Returns will be available on purchases made through guests’ Target.com accounts. In addition to making the Target guest experience easier, Drive Up Returns brings more efficiency to the retailer’s returns process and reduces expenses for mail-in returns.
Target plans to open about 20 new stores in a variety of sizes. Many of these stores will include new design elements that reflect the local community, experiences that highlight new brands, assortment and services, and sustainable features. Target is also making investments in about 175 of its existing stores, ranging from full remodels to the addition of Ulta Beauty at Target or Apple at Target shop-in-shop experiences, or expanded capacity for same-day fulfillment services.
The company also plans to expand its sortation center network from nine to more than 15 locations by the end of 2026, which will expand its next-day delivery capabilities in major U.S. markets. These specialized supply chain facilities allow Target to deliver digital orders faster, more efficiently and at a lower cost, with up to 40 percent of orders delivered by its last-mile delivery capability arriving next day. Additionally, these facilities remove pressure from Target’s stores, giving team members more time to serve guests.
Target also expanded upon its newly introduced enterprise efficiency efforts, aimed at simplifying its operations and enhancing its team and guest experience while fueling near- and long-term growth. While this efficiency work will be a sustainable, long-term plan, Target’s goal is to achieve $2 billion to $3 billion in cost savings over the next few years.