It didn’t take long after acquiring a logistics provider for Target to reveal it has expanded its next-day essentials delivery service, Target Restock. On August 15, Target expanded the pilot program from Minneapolis to tests in the Dallas-Fort Worth and Denver markets.
The expansion comes at a convenient time for Target, which saw Q2 digital sales jump 32% and total sales increase 1.6% to $16.43 billion. The retailer has continued to invest in its e-Commerce channel to keep up with Amazon and Walmart. At the same time, the retailer will thrust more than $7 billion in capital over the next three years into the revamping of 600 brick-and-mortar stores.
In addition to bringing Restock to new markets, Target updated the service to:
Expand the assortment to more than 15,000 items, including school supplies and baby food;
Deliver on Saturday; and
Open the service to all guests, instead of just Target REDcard holders.
Like some of its traditional counterparts, Target exceeded Wall Street expectations in Q2, surpassing estimates in sales and earnings. But the tempered expectations stemming from retail’s underperformance over the past year hint that brands can’t simply rest on their laurels if they want to dig out of the hole they’ve put themselves in.
Target appears to be taking this to heart with the Restock expansion, as well as the possible expansion of same-day delivery. In a note to clients, Cowen & Co. analyst Oliver Chen indicated that Target also would have to differentiate itself by focusing on executing new merchandising and offering customers value through pricing and convenience.