It’s not going to be Macy’s and Wal-Mart having all of the fun with boosting and putting muscle on their online retail. Target has plans to get their e-commerce to gain more of the market by shipping from their brick-and-mortar stores.
Target has announced that it plans to expand its ship-from-store capabilities after strong sales results its’ second quarter this year. Internet Retailer reported that Target’s online sales grew 26.1% over this same time last year. E-commerce accounted for 2.7% of the retailer’s sales overall in the second quarter, equating to $470.529 million. Its’ e-commerce accounted for 2.2% of Target’s overall sales, equating to $373.054 million, in the same quarter last year. Target is doing something right online.
CEO Brian Cornell discussed the growth benefits of shipping from their stores. “Ship-from-store capabilities allow us to balance inventory across the network, leverage the capital and labor already in our stores, and reach guests more quickly,” he told analysts. He also mentioned Target’s testing of its’ “available-to-promise” pilot program, offering guaranteed packages will be received within 2-3 days. “If the guest orders on a specific date, we believe this capability will drive further increases in digital conversion rates, which are already improving rapidly as guests respond to a faster and firmer delivery commitment,” he said.
With same-day delivery, having physical stores to fall back on is something that web-based only retailers don’t have. It is another element that can make or break the trending service. E-retail giant eBay just ended its’ three-year involvement with its’ same-day strategy. EBay Now has been officially pulled, yet eBay mentioned how the company would continue to explore delivery options of buying online and pick-up in stores. If eBay would have been a physical store retailer, maybe more innovation could have been tested. This attests to the power of having physical store locations that act as warehouses for retailers.
Target can be versatile as a retailer providing the products that makes ship-from-store deliveries attractive. Shoppers need time-sensitive items like groceries, baby items, household goods, and clothing that make same-day delivery work. Amazon, although web-based, has thousands of products offered online, yet as the same time, has a very efficient delivery system from multiple fulfillment centers nationwide. Now Amazon is offering free same-day delivery via Prime Now in multiple US cities, making it imperative for Target and others to compete.
Google partners Toys-R-Us, BestBuy, Wal-Green’s,and even Target, to perform same-day delivery for them to push their retail products out of their stores. More retailers are following suit, using a same-day courier to pick up and deliver for them. AQuickDelivery is an Atlanta Courier that offers same-day delivery, store pick-up services, and more for retailers in need of innovative fast shipping. Target can utilize the courier for ship-from-store deliveries, even within an hour. With expanding its’ store shipping reach, Target hopes to get its’ shoppers the convenience they’re after.
Reference: 8.19.15, www.internetretailer.com, Matt Lindner, Target goes full speed with ship-from-store