March 1, 2022

5 minute read

Target's Leadership in Store-Based Fulfillment is Driving Outsized Digital Growth

30 Second Summary

Target delivered impressive results for the fourth quarter and raised its long-term revenue growth target from low single digits to mid-single digits.

  • The company emphasized its store-based fulfillment model as critical to its digital success, driving average per unit fulfillment costs down 50% over the last three years.
  • Food & Beverage appears to be one of the most exciting categories for Target’s digital business, with the company indicating they are now the fourth-largest digital grocery channel in the U.S.
  • Like Walmart disclosing the size of its Connect business at $2.1 billion, Target’s Roundel media business is delivering $1 billion in “value”.
  • The strategy for Target’s marketplace remains a curated approach that complements, rather than competes with, existing brand partners.

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