Target’s Drive Up curbside pickup service, which enables shoppers to have their online orders delivered to them in a designated area in front of the store, is now available in nearly 1,750 of the retailer’s 1,855 stores and in all 50 states. That’s more than double the roughly 800 stores that offered the service last summer and up nearly 75% from last holiday season.
That rapid growth is a reflection that same-day fulfillment—including curbside pickup, in-store pickup and orders delivered by Shipt—is the fastest-growing part of the retailer’s digital channel. Same-day fulfillment accounted for about one-third of Target’s second-quarter ecommerce revenue and three quarters of its ecommerce growth. Nearly 1.5 percentage points of the retailer’s 3.6% total revenue growth came from ecommerce growth. Shipt is a same-day delivery service Target acquired in 2017.
Revenue from orders fulfilled on the day they were placed has doubled in the last year, said John Mulligan, the retailer’s chief operating officer, on a call transcribed by Seeking Alpha. These same-day orders also are the retailer’s most profitable digital offering.
Curbside pickup generates the highest guest-satisfaction rating among all of Target’s fulfillment options. And it is growing quickly; the retailer fulfilled more than 5 million orders via its curbside service in the first half of the year, which is more than double the total number of Drive Up deliveries it handled in all of last year, Target says.
Target’s ability to rapidly expand its same-day options has stemmed from a number of changes it has made to help its employees more efficiently pick and deliver consumers’ items, CEO Brian Cornell said earlier this month. For example, it optimized picking paths so that employees don’t have to repeatedly go from the back of the store to the retail floor as they gather customers’ orders.
“As we shift our fulfillment from upstream distribution centers to our stores, we see our cost go down by upwards of 40%,” he says. “When it moves to one of our same-day options, pick up in-store, drive-up or Shipt, we see a 90% reduction in that cost.”
These efficiency increases also improved customer satisfaction, he says. For example, the average wait for a Drive Up order is two minutes once the driver pulls into the parking lot, which Mulligan says is better than the industry standard. In addition, Target altered its return process, and now grants refunds as soon as return packages are scanned into a shipping carrier’s system, which cuts days off refund wait times, Mulligan says.
Target aims to entice shoppers to use Drive Up by offering some consumers free product samples when they pick up their orders at new Drive Up locations .
Target is No. 16 in the Internet Retailer 2019 Top 1000.
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