Target is rolling out three new sortation centers throughout the next year to help power delivery across the country.
Two of these centers will be located in greater Chicago, and one will be positioned in the metro area of Denver, Colo., adding to the company’s existing six sortation centers across the U.S. The centers function as places to pack and sort items for local deliveries.
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According to Target, these centers represent the next step in its strategy to use its stores as fulfillment hubs by giving team members a space to unpack and sort merchandise before it enters a store’s backroom. This helps the company move merchandise more efficiently to fulfill more orders.
The move comes as other retailers ramp up their delivery capabilities and speed as well. Earlier this month, Walmart made a major investment in its last-mile delivery capabilities and signed a deal with Canoo to purchase 4,500 electric delivery vehicles with the potential to expand to 10,000. In April, Walmart announced new pay raises for its truck drivers and a “Private Fleet Development Program” to train new associates.
Target has made investments in its store hub model since before the pandemic. Around 2017, Target introduced a plan that included a multibillion-dollar investment into store remodels, opening new stores in urban centers such as New York City, and redesigning its stores as fulfillment hubs and activating 1,900 fulfillment centers across the U.S.
When city and statewide shutdowns occurred during the pandemic’s onset, Target was prepared with alternative ways to get products to consumers, thanks to early investments in curbside pickup and its store set-up.
“Those investments certainly paid back in a big way during the pandemic,” Target CEO Brian Cornell said at NRF’s Big Show in January.
In 2018, Target rolled out same-day delivery in certain markets for its Shipt delivery service. In September of 2021, Shipt announced that it would offer same-day delivery from almost 1,000 additional store locations. The platform also expanded access to over two million more households that were previously outside of Shipt’s coverage zone.
Target said its digital sales have grown almost $13 billion between 2019 and 2021. Stores fulfilled more than 95% of its total sales in 2021, the company said.
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