Why 2018 Is The Year Of Modernization For Target

by MR Magazine Staff

Target’s new facility in Perth Amboy, New Jersey, equips the company to achieve 40% fewer out-of-stocks than before. A remodeled store, the chain says, will bring in 2% to 4% more sales soon after it reopens. A decision to move to free two-day shipping, COO John Mulligan said in an earnings call, was an unequivocal success, bringing “an immediate increase in [the] number of orders, basket size, units and sales.” These three big wins were headline news after a first quarter earnings call featuring the strongest traffic growth in more than 10 years, by CEO Brian Cornell’s count. But behind the headlines lies a strategy that ties all the wins together. Many of the results, according to the earnings call, were a consequence of a commitment to move product to and from stores faster than ever before. New distribution centers, remodeled backrooms at stores and a revamped delivery-fee structure are but a tip of the $7 billion iceberg that makes up Target’s supply chain strategy for the next three years. A strategy which may be best described in one word: modernization. “When you think about the work we’re doing across the operations team, you quickly see that it’s all about modernizing how we work, both our operating model and how we use our physical assets,” Mulligan said to investors. Read more at Retail Dive.