Target expanding next-day delivery, opening new fulfillment centers

The retailer plans to make a $100 million investment during the next three years to expand next-day delivery in major U.S. markets.
Connor Perrett
A worker at a Target facility in Minneapolis.
  • Target is making a $100 million investment in its next-day delivery capabilities. 
  • The retailer said it will grow its sortation centers network to more than 15 fulfillment centers by 2026.
  • Target expects to deliver 50 million packages from sortation centers this year — double the amount it sent from the facilities in 2022. 

Target will make a $100 million investment to bring next-day delivery to more U.S. consumers by 2026. 

The retailer in a Feb. 22 release said it would open more than half-a-dozen new sortation centers, bringing its total number of fulfillment centers to more than 15. Target currently has nine sortation centers in Minnesota, Texas, Colorado, Illinois and Pennsylvania, which includes the three facilities it recently opened in the Chicago and Denver areas.

Target said the fulfillment centers were important to sustaining its e-commerce business, which grew $13 billion from 2019 to 2021, the release said. In 2021, 95% of all of Target’s sales — both brick-and-mortar and e-commerce — were fulfilled at Target stores. Target says its sortation centers free up space in store back rooms and employees’ workload. 

“Now more than ever, our guests rely on us to deliver their everyday essentials and Target favorites when they want and need them most,” said Gretchen McCarthy, Target’s chief global supply chain and logistics officer, in a statement sent to Retail Leader. “Through our sortation centers and ‘Target Last Mile Delivery’ capabilities, we’re able to move faster and with more precision — while controlling costs and expanding our network capacity — for years to come.”

It’s the latest move from the retailer that indicates its growing focus on its e-commerce business. Target — one of the pioneers of the small-format concept store — last year said it would focus on opening larger stores in the years to come. One of the most significant changes coming to the larger-format Target stores is a back-room fulfillment space five times larger than at stores of a similar size, which the retailer said would allow it to fulfill digital orders and same-day services more easily. Target last year said digital orders and same-day services accounted for more than 10% of its overall sales.

Since Target opened its first sortation center in Minneapolis in 2020, the retailer has delivered 150% more next-day orders than before it opened the centers. It plans to deliver 50 million packages from sortation centers this year, double the amount delivered from them last year. Target’s next-day deliveries are furnished by third-party delivery service providers or by Shipt, the delivery company it purchased in 2017 for $550 million.

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