A lot more of Target Corp.’s business will soon occur just outside its stores.
Starting this fall, the retail chain will allow customers in some markets to return items and pick up a Starbucks beverage when they use its curbside pickup service, which it calls Drive Up. Target also will expand its “backup item” functionality to its same-day delivery services in even more categories to allow shoppers more control over their lists.
Drive Up, part of a triad of same-day omnichannel options that includes pickup in stores and same-day delivery via Target’s Shipt unit, has been the fastest-growing of the three. According to company reports, during Target’s fiscal Q3, which ended on Oct. 30, 2021, sales via Drive Up soared more than 80% year over year. And that was on top of 500% growth for the year-earlier period.
A ‘truly brilliant’ move from Target
In a news release, Target said the upgrade to its Drive Up service expands on the retailer’s strategy of using its nearly 2,000 stores “as fulfillment hubs, powering its suite of contactless same-day services.” The retailer says its online sales have more than doubled during the last two years, and its three same-day services account for more than half of those sales.
“Target’s move to add these services for curbside is truly brilliant, reflecting their true commitment to customer-centricity,” says Jessica Jackson, senior consultant with ecommerce advisory firm FitForCommerce. “They’re playing the long game when it comes to customer satisfaction and engagement with the brand.”
FitForCommerce was acquired in January by OSF Digital, a technology consulting and implementation company based in Quebec, Canada.
By making it easier for shoppers to complete returns—a process they often find annoying and inconvenient—Target is “removing friction” from the customer experience, Jackson says. Adding Starbucks orders to the equation, she adds, the retailer moves beyond reducing friction by adding value for the shoppers.
“In an Amazon-dominated space, this gives Target a meaningful advantage with shoppers,” Jackson says. She was not aware of another retailer taking returns via curbside.
In its news release, Target said it added the Starbucks option because it was a top request in a recent customer survey. When the new feature becomes available, consumers will use the Target app to indicate they’re “on their way” to the store and Target will then show the option of ordering from the Starbucks menu via the Target app. Upon arrival, a Target employee will deliver the entire order — including any Starbucks items — to the customer’s car. Similarly, guests will get the ability to initiate a return via the Target app and complete it at the Drive Up lane.
The expanded backup item functionality will enable customers to select alternative items from a wider assortment of categories, including beauty and household essentials. The functionality, already available for grocery purchases, allows shoppers to designate backup items for their Drive Up and in-store pickup orders, just in case their first-choice items are unavailable. For example, a shopper purchasing whole milk, could select 2% milk as a backup item.
Target expanded its backup item selection options last fall for food and beverage items. Since then, Target said, it has successfully substituted backup items 98% of the time.
Target is No. 6 in the 2021 Digital Commerce 360 Top 1000 ranking of North America’s leading online retailers.