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Target enters paid subscription category

Called Target Circle 360, the program will include unlimited free same-day delivery for orders over $35 in as little as one hour and two free-day shipping and access to Shipt Marketplace.
3/7/2024

Target's new 10-year plan includes a big commitment to brick-and-mortar.  

The discounter said it plans to build more than 300 stores over the next decade as its looks to reach "new guests with a shopping experience that's welcoming, convenient and fun, whether they're shopping the aisles or using same-day services." The news followed the release of the chain’s better-than-expected fourth-quarter results. 

Target also plans to invest to enhance the vast majority of its nearly 2,000 stores. The projects range from full remodels to adding Ulta Beauty in-store shops, upgrading fixtures, supporting same-day services and more. 

Speaking at the chain's 2024 Financial Community Meeting, chairman and CEO Brain Cornell noted that two-thirds to three-quarters of shopping is currently still done in physical stores.

"If you think store shopping will wind down any time in the decade, we’ll politely disagree – again,” he said.

[Read more: Target reports Q4, full-year results]

 

At the meeting, Cornell also said that he expects Target's total revenue during the next decade will grow by an average rate of roughly 4% per year.

“If we attain that goal, our business will add more than $50 billion of revenue on top of the $107 billion we delivered in 2023," he noted.

In addition, Target will continue to enhance its supply chain operations for increased efficiency, speed and capacity through sortation centers and the use of artificial intelligence to drive improved inventory efficiency and forecasting across its network.

Paid Membership Program

The discounter is also following its rivals and getting into the paid subscription membership game. Target plans to launch a paid membership program, called Target Circle 360, in April.  The program will include unlimited free same-day delivery for orders over $35 in as little as one hour, two free-day shipping and access to Shipt Marketplace, which offers same-day delivery from more than 100 retailers nationwide. 

Starting off, the program will offer a promotional price of $49 per year. The price will rise to $99 per year after the promotional period ends on May 18. Customers who have a Target Circle credit card will be able to pay the lower price of $49 per year beyond that date.

The new program is part of an overall upgrade of the retailer’s free loyalty program, Target Circle, which debuted in 2019 and has more than 100 million members.  The program is being made easier to use and more personalized.   

The retailer is also rebranding its Target Circle (previously known as Target RedCard) credit card program. The card will include an extra 5% off customers’ purchases, free two-day shipping on many items and extended time to make returns.  Members will now be able to scan an item’s barcode at physical checkout to have deals automatically added to their purchase.

[Read more: Target unveils low-price owned dealworthy brand]

 

“By evolving and upgrading our experience, we’re going to make it even easier for our guests to interact with Target in a way that feels right for them,” Cara Sylvester, chief guest experience officer, said at the company's investor event on Tuesday. “We’re confident with the relaunch of Target Circle that not only will our current guests shop us more often, but we’re well-positioned to welcome even more shoppers to Target.”

Both Amazon and Walmart offer paid membership subscription services.

Amazon initially launched Amazon Prime in 2005, creating the template for a paid retail subscription program. Benefits include free one- and two-day shipping on eligible products, as well as free same-day delivery for eligible orders meeting minimum threshold ($25 in most U.S. metro areas) and free use of Amazon’s digital streaming, gaming and music services.

Initially introduced in in September 2020, Walmart’s program, Walmart+, offers benefits including unlimited free delivery on orders of $35 or more, gasoline discounts of up to five cents a gallon and access to the chain’s Scan & Go app, which allows shoppers to avoid checkout lines by scanning items in the store and checkout using Walmart Pay.

Both Prime and Walmart+ also offer a variety of other perks and services, some for free and some for an added fee. 

This story originally appeared on Chain Store Age

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