Aim is to improve the retailer's ability to handle the large volume of packages moving through it stores each day.
MINNEAPOLIS – Target is testing a new delivery concept to get merchandise to online shoppers in a more efficient manner.
The plan enlists a team of delivery drivers and involves the “sortation center” the company opened last year to serve stores in the Minneapolis-St. Paul area, the company said April 15 in announcing the pilot, set to begin serving shoppers in the Twin Cities by the end of the month.
As online order come in, store employees will pick up and pack the items, which will be trucked to the center and then sorted according to destination, a process that will be handled with the help of technology from two firms Target has acquired – Deliv and Grand Junction. Finally, contract workers enlisted by Target’s Shipt subsidiary, along with Shipt employees, will deliver the packages to the buyers’ homes.
Target is planning to introduce sortation centers in other markets later this year.
“For years, Target has put our stores at the center of how we serve our guests. Our new sortation center builds on that model by helping us ship online orders with greater speed and lower costs, while making room for future growth,” says John Mulligan, Target’s chief operating officer. “By adding Shipt to that operation, we’re now testing how we can reach guests even faster with efficient local deliveries.”
Target acquired Shipt in 2017. It acquired Menlo Park, Calif.-based Deliv last year for its technology that intelligently batches orders bound for the same area, and which provides crowdsourced, last-mile logistics for same-day delivery services to food retailers, restaurants and other businesses. Target in 2017 also acquired San Francisco-based Grand Junction, provider of a software platform used by retailers, distributors and third-party logistics providers to manage local deliveries through a network of carriers.
“The enormous investments we made in supply chain, store operations, and technology capabilities are already powering exponential growth in digital commerce,” Target CEO Brian Cornell said last month during the retailer’s fourth-quarter earnings call. “They’ve enabled us to use our stores as showrooms and service centers, but also as hubs for digital fulfillment. Without these investments, we simply wouldn’t have been able to satisfy the exploding guest demand for same-day services, represented by more than 600% growth in drive-up. Likewise, Shipt is an extraordinary capability that grew by more than 300% last year and will continue to grow as more guests recognize the power of having their purchases brought to their doorstep in as little as an hour.”