“And so, if they do want us to ship something to their home, we want to make that as efficient as possible.” “Our goal is to meet the guest where they are, when they want, how they want,” John Mulligan, Target’s chief operating officer, told US cable business news channel CNBC. Major planks of this undertaking are the addition of four distribution centres, ten sort centres and 30 new retail locations, as well as the renovation of 200 stores to enable them to handle same-day fulfilment, pick-ups and returns.įor Target management, delivery both from sort centres and stores, is the way to go in order to provide omni-channel services. In March Target management announced plans to spend $5bn in an overhaul of its logistics network. The addition of sort centres is part of a broader investment strategy of the retail giant. “Target’s ability to deliver from stores makes sense, but stores weren’t built to be mini fulfilment centres.” “There’s so much business from e-commerce, it makes sense to move some of it away from stores,” said Mr Haber. “If you store is a distribution centre, your inventory there had better represent what people are buying online from you,” he further commented. “They improve route density and cost of last mile operations, and they take some of the pressure off stores – both in terms of operations and the inventory required to stock there,” he added. “Setting up more sort centres is about improving service as well as achieving better margins,” remarked Rick Watson, founder and CEO of e-commerce strategy consulting firm RMW Commerce Consulting. The addition of these three branches increases its footprint in sort centres by 50%, with altogether nine facilities in place before 2023. All three are scheduled to open before the end of the year. It is boosting its presence in this sector with the opening of three new facilities – two in the Chicago area and one in Denver. Target is looking to generate better density – and margins – for its same-day delivery scheme with the creation of more sorting centres. This augments the chances that Amazon will have multiple shipments to collect from one location, providing better density of shipments, Mr Haber noted. “It’s from a lower base, but it’s going to be huge.”Īll retail stores of the participating retailers in the initial markets are located in shopping malls. “That’s going to be massive growth for them,” he predicted. John Haber, chief strategy officer of Transportation Insight, sees promising potential there. “We are excited to see this new model come to life and look forward to adding more brands, stores and locations to the programme,” said Sarah Mathew, director of Amazon delivery experience.
Naturally, the e-commerce behemoth is looking to boost that number. Consumers can also select to pick up the merchandise themselves from the stores at no charge.Īmazon’s new offering kicked off with 24 participating stores including Diesel and SuperDry.
#Target online shopping free
The service is free to subscribers to Amazon’s Prime service for orders of $25 or more, with a charge of $2.99 for orders below that threshold. When customers place orders with participating retailers and select the same-day delivery option, Amazon sends them to the respective stores for shipment preparation and picks up the goods for delivery. The e-commerce giant has done some same-day deliveries from distribution and fulfilment centres, but this is the first foray into the store-to-consumer arena.Īt this point the service is available in a dozen metropolitan areas in the US, including Atlanta, Chicago, Dallas, Miami, Las Vegas and Washington. The push for same-day deliveries, which had been largely halted by the pandemic and the ensuing surge in parcel volumes, is picking up momentum again with new drives by Amazon and Target.Īmazon is looking to build up steam with a same-day offering for local deliveries of online orders from retailers’ stores.
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