Target Corp. will invest up to $5 billion on physical stores, digital experiences, fulfillment capabilities and supply chain capacity in 2022 to further differentiate its retail offering and drive continued growth, the company announced.
Target plans to open 30 stores in 2022, reaching more guests in new neighborhoods. The new stores will range in footprint from mid-size locations in dense suburban areas to small-format stores in the city centers of Charleston, SC, and New York, where the Target will be located in Times Square, the company relayed.
In addition to new stores and its commitments on the labor front, Target will invest in the company’s remodel program with 200 top-to-bottom renovations in its existing portfolio. Target noted that it has renovated half the chain since beginning this remodeling effort in 2017. The company added modern design elements, such as brighter lighting and elevated merchandise displays and adding enhanced hold space and pickup areas to facilitate online fulfillment. In addition to the full-store remodels, Target will complete hundreds of smaller projects across the chain to support the growth of its fulfillment services and expansion of in-store brand partnerships.
Target said moves taken to upgrade the physical store and online shopping experience will elevate strategic and other brand partnerships, as those with Ulta Beauty, Disney, Levi’s and Apple, and build relevance with guests. As such, the initiatives should drive incremental growth, Target stated. After the opening of 100 Ulta Beauty at Target shop-in-shops in 2021, the company intends to follow up by introducing the partner operation at more than 250 new locations by the end of 2022. Target plans call for at least 800 Ulta Beauty at Target locations to open over time.
Target said it has been investing in online technology to fuel growing digital capabilities such as Roundel, which optimizes advertising placements on Target.com to create a more relevant, personalized guest experience and value for vendor partners. Roundel drove more than $1 billion in value in 2021, according to the company, and Target expects that to grow to more than $2 billion in the next few years.
Additional technology enhancements will enable guests to purchase Supplemental Nutrition Assistance Program-eligible grocery items on Target.com, building on the SNAP payment capabilities in stores. SNAP customers can shop for SNAP-eligible items online and choose Target’s free, same-day services drive up and order pickup, adding ease and convenience to the shopping experience.
Target will continue enhancing its same-day offering by adding Starbucks orders and easy returns to its drive-up service in select stores and expanding its backup item option for pickup orders to more categories. To add speed, efficiency and capacity to its fulfillment operation, Target continues investing in sortation centers, which organize digital orders packed by local stores for fast neighborhood deliveries. It is expanding this model beyond Minneapolis, with five facilities slated to begin operation in Dallas, Houston, Austin, Atlanta and Philadelphia by spring. Target plans to open another five later in the year. Sortation centers enable a next-day shipping capability in dense markets and allow the company to further scale its stores-as-hubs strategy, the retailer pointed out.
Target has four distribution facilities currently in development to expand supply chain capacity, with plans for several more in the next few years, it added.
