Target is giving some of its brand collaborations in-store exclusivity, holding back online sales for the first day or two.
The retailer has used that approach for partnerships expected to draw lines outside stores, Daryl Glass, its senior vice president of fulfillment and last mile, said at the WWD Apparel and Retail CEO Summit.
Speaking with Glenn Taylor, logistics editor at WWD’s sister publication Sourcing Journal, Glass said other launches lean more heavily on digital sales. Inventory allocations between stores and fulfillment centers also vary by partnership.
Those decisions require Target’s commercial, digital, operations and marketing teams to coordinate with one another and the brand throughout the launch. For preorders, that includes aligning fulfillment with release dates for store and online customers, Glass said.
The executive said Target is in the first year of a growth strategy focused on distinguishing its merchandise assortment and improving the shopping experience. The merchandise push spans owned brands, national labels and limited-time collaborations, extending into categories such as food. He identified busy families as the customer group guiding the retailer’s decisions about its assortment and services.
The retailer also revealed a refresh of its Threshold home brand that day, with more than 800 new items and changes to how products are presented in stores and online.
“I’ve been asked a lot about what’s the balance of digital and in store, and really it’s less in my mind a balance and more of a blend,” Glass said.
For everyday online orders, Target is changing which stores pack and ship merchandise. Glass described starting with a city and drawing concentric circles around it to determine where to offer same-day, next-day and other delivery services. The retailer then assesses the stores, fulfillment centers and supply chain facilities within that area. Bringing supply closer to demand gives Target more options for filling orders, he said.
“Some stores are doing a lot more fulfillment. Some stores are doing much less and some stores are doing none,” he said, referring to traditional parcel shipments.
Target can choose where to pack and ship a home-delivery order. Drive up and pickup orders need to be ready at the store the shopper selects.
“Simplistically, if a store has a large back room, it’s a bit easier to do brown box fulfillment out of a large back room than it would in a store with heavy, heavy foot traffic and a small back room,” Glass said.
The changes have improved stock availability, in-store customer experience scores and pickup service in markets using the approach, according to Glass.
For brands seeking space on Target’s shelves, Glass said a partnership must meet a consumer need, be culturally relevant and benefit both companies. Keeping that space depends on staying in stock and responding to changes in demand.
“Sales trends could adjust. They could adjust by region. They could adjust by market,” Glass said of emerging brands. “How do we learn, iterate and continue to grow? Continue to grow together.”
Target uses artificial intelligence to help determine order quantities and identify low stock, he said. The tools can flag when stores need merchandise moved out of a back room or replenished from elsewhere in the supply chain. Employees remain involved in critical decisions, particularly for limited-time collaborations with little sales history to guide forecasts. Human input also helps inform and develop those models over time, Glass said.
The company has also deployed AI tools to help employees complete tasks and offers shoppers an assistant called Ask Target in its app, he said.
Target has 8,000 new gifts this holiday season, roughly half of which are exclusive to the retailer and most under $20, Glass said. Stores nationwide were scheduled to switch to their holiday setup the week after the summit.
Glass is in his 24th holiday season at Target. Planning runs all year. Looking back at last season, he asks: “What did we do well? Do we repeat that? Is that going to be relevant this year?”
Fulfillment peaks around Black Friday and Cyber Monday, he said.
Pickup and drive up are available at nearly all of Target’s roughly 2,000 stores, Glass said. The retailer can deliver the same day to about 80 percent of the U.S. population. Next-day parcel service reaches about 60 percent, and two-day shipping reaches 99 percent.
Target is expanding next-day parcel delivery, Glass said, and both same-day and next-day services are growing.
More than 98 percent of in-store pickup and drive-up orders are ready within two hours, he said. Almost 80 percent of same-day deliveries arrive in less than three hours.
“I don’t know if speed will ever settle, because the consumer expectations are going to continue to evolve,” Glass said.
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