Feb 22, 2023 - Economy

Target drops $100 million to speed up online order delivery

Target employee works in sortation facility moving boxes

Target officials said Wednesday that the retailer is investing $100 million to expand next-day delivery. Photo: Target

Target is looking to get online orders to customers faster by expanding next-day delivery across the country.

Driving the news: The Minneapolis-based retailer announced Wednesday that it will invest $100 million to scale its supply chain sortation center network by opening six additional centers by the end of 2026.

  • Target currently has nine centers in Minnesota, Texas, Colorado, Illinois, Georgia and Pennsylvania with centers in Chicago and Denver recently opening, the retailer said.
  • Target said the expansion of its network “provides a fast, efficient, reliable and low-cost delivery option for our business, benefiting both our guests and the bottom line.”

Why it matters: Consumers are focused on price and delivery reliability, Axios' Hope King reports, which is why we’re seeing Target, Amazon and Walmart focus on expanding their logistics capabilities to cover as many products and geographic areas as possible.

By the numbers: Target opened its first sortation center in 2020 and says there has been a 150% increase in the number of orders delivered to consumers the next day.

  • Target said it expects to deliver 50 million packages through the sortation centers in 2023, which is double its 2022 numbers.
  • Up to 40% of Target last-mile delivery orders with Shipt are currently delivered by the next day.
  • The retailer said the new sortation centers will create hundreds of jobs.

How it works: Target said markets that have a sortation center will “retrieve packages daily from a range of 30 to 40 local stores, depending on the market.”

  • The packages are brought to the sortation center to sort, batch and route for delivery to local neighborhoods by a third-party carrier or Shipt delivery route, depending on the lowest-cost carrier option, Target said.

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