Online sales were a bright spot for Target Corp. in its fiscal Q3 2025, which ended Nov. 1.
Target’s online sales have now grown while total sales declined in each of the retailer’s first three fiscal quarters this year. Total Target sales were $25.27 billion in its fiscal Q3. That’s 1.5% lower than its $25.67 billion the prior year. The retailer recently cut 1,800 jobs from its headquarters (about 8% of that segment’s workforce).
In his final earnings call as CEO, Brian Cornell shared highlights from his career at Target. Among them, he noted its partnership with CVS to run Target’s pharmacy business, launching billion-dollar brands, and Target having “pioneered the stores as hubs model for digital fulfillment.”
“That said, our business has not been performing up to its potential over the last few years,” Cornell told investors.
Michael Fiddelke, current chief operating officer and incoming CEO, said the retailer is “acting with urgency to make the changes in investments to position Target for sustainable and profitable growth over time.”
Among its plans to operate “at full potential,” Fiddelke cited three priorities:
- Target must “solidify” its “design-led merchandising authority”
- Offer a more consistently elevated experience across its stores and digital platforms
- “More fully” use technology to improve speed, guest experience and efficiency
The same day it shared its Q3 earnings, Target announced a partnership with OpenAI’s ChatGPT. The retailer is launching an app on OpenAI’s platform during Thanksgiving week, it said.
Target is No. 5 in the Top 2000 Database. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.
Target is also No. 64 in the Global Online Marketplaces Database, which ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV).
Target online sales in Q3
In Q3, Target online sales grew 2.4% year over year. The retailer said that same-day delivery, which grew more than 35% year over year, led Target’s digital sales growth. The 2.4% growth also builds on 11% growth in Q3 2024.
First-party Target online sales grew in the mid single digits, according to chief financial officer James Lee. However, the Target Plus marketplace grew its gross merchandise volume (GMV) by about 50%, Lee said.
Furthermore, ad sales through its Roundel business grew in the mid-teens, he said. Roundel refers to Target’s retail media network.
To improve both Target’s in-store and online experience, Fiddelke said, the retailer has enhanced its digital tools to reduce how much time employees will devote to “backroom tasks.” He said the digital tools improve employees’ efficiency with truck unloading and stocking. The time they save goes into interacting with consumers shopping in stores, he said.
Furthermore, Target is reconfiguring the role each of its stores plays to optimize fulfillment speed and capabilities while “better supporting the in-store shopping experience,” Fiddelke said.
“For lower volume stores in the same market with big back rooms that are perfectly suited to ship product, we’re pushing more digital fulfillment volume their way,” he said.
He noted that Target already reached about 80% of the U.S. population with same-day delivery. Additionally, “around 99%” of the population is already eligible for two-day shipping. With its evolving strategy, more than half the U.S. to be eligible for next-day shipping. It expects ” to meaningfully expand that reach in the coming year,” he added.
This holiday season, Target has invested in a generative artificial intelligence (AI)-powered gift finder for its website and mobile app. It allows guests to ask questions and suggests products.
Target sees ChatGPT integration as opportunity to elevate experience
Part of elevating experience “means staying ahead of new ways our guests want to shop,” Fiddelke said.
That has led Target to build an app for ChatGPT, “curating the shopping experience directly from the guest’s own conversation,” he added.
Consumers will also be able to request personalized recommendations, browse and build shopping carts from Target’s full product catalog, and purchase through their Target account.
Check back for more earnings reports. Click here to read last quarter’s article on Target earnings and online sales.
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