Target (NYSE:TGT) will soon have delivery centers and gig workers in three more places besides its hometown of Minneapolis − two in the Greater Chicago area and one near Denver − to get online orders to doors quicker and at a lower cost.
The new centers are part of growing push among retailers including Walmart (NYSE:WMT) to make e-commerce more profitable as shoppers spend online and expect purchases to get to their doors within a day or even hours.
Since it began testing at the Minneapolis facility in late 2020, Target has added five similar hubs where ready-to-go packages are sorted and grouped together to create dense delivery routes. The three more are slated to open by the end of January.
“Our goal is meet the guest where they are, when they want, how they want,” Chief Operating Officer John Mulligan said in an interview. “And so, if they do want us to ship something to their home, we want to make that as efficient as possible.”
E-commerce now drives just shy of 20% of Target’s sales, with more than half of that coming from same-day services like curbside pickup and the rest from shipping to homes.
Yet because of labor and transportation costs, those sales are less profitable than when shoppers visit Target stores, grab item off shelves and take them home.
TGT opened Monday trading down 80 cents to $156.94.
