Target has big plans for 2022, with the retailer announcing plans to invest up to $5 billion this year to open new stores, enhance its digital, fulfillment and supply chain capabilities, and expand its shop-in-shop concept with Ulta Beauty. The news comes on the heels of an announcement that Target will invest up to $300 million this year to increase the starting wage range and expand healthcare access for its workers.
“Years of investment in our team and business have driven our sales beyond $100 billion and positioned Target to meet the needs of our guests no matter how they choose to shop,” said Michael Fiddelke, CFO of Target in a statement. “We see substantial opportunities to build on our core capabilities to drive deeper guest engagement and long-term growth.”
Following the opening of 100 Ulta Beauty at Target shop-in-shops in 2021, Target will open more than 250 new locations by the end of 2022, with ambitious plans to eventually reach at least 800 locations. Fellow retailer Kohl’s is on a similar trajectory with its competing Sephora at Kohl’s concept; Kohl’s will add 400 more Sephora shop-in-shops this year and plans to reach 850 by 2023.
Target also plans to open approximately 30 additional stores in 2022, ranging from mid-size locations in dense suburban areas to small-format stores in city centers like Charleston, S.C. and New York’s Times Square.
Other areas of investment announced by the retailer include:
- Top-to-bottom renovations of 200 existing stores, bringing the total percentage of remodeled stores to more than half its fleet since the effort began in 2017. The redesigns include brighter lighting, elevated merchandise displays and enhanced hold space and pickup areas for online fulfillment;
- On top of the full-store remodels, Target will complete hundreds of smaller projects across the chain to support the growth of its fulfillment services and expand in-store brand partnerships;
- Ongoing technology investments will fuel the company’s growing digital capabilities, including its retail media network Roundel. Target reports that Roundel drove more than $1 billion in value in 2021 and it expects that to grow to over $2 billion in the next few years.
- Enhancements to its same-day delivery offering with the previously announced addition of product returns and Starbucks order pickup to its Drive Up service at select stores, as well as an expansion of the backup item option for more categories. Since 2019, Target reports that its same-day fulfillment services have grown nearly 400%, accounting for more than half of the company’s $13 billion in digital growth.
- Continued investment in sortation centers for the delivery of digital orders by local stores as part of the company’s “stores-as-hubs” strategy. Target will expand the model beyond Minneapolis with five more facilities operating across Dallas; Houston; Austin, Texas; Atlanta; and Philadelphia to open by spring 2022, and another five planned to open later this year.
- The development of at least four new distribution facilities to expand supply chain capacity, following the opening of two such facilities in 2021.
- Enabling guests to purchase Supplemental Nutrition Assistance Program (SNAP)-eligible grocery items on Target.com, building on SNAP payment capabilities in stores.
Target isn’t the only major retailer doubling down on 2021 gains with significant growth investment plans:
- Macy’s just announced that it will spend $5 billion to invest in designers, brands, business partners, products and service providers from underrepresented groups as part of its new Mission Every One platform aimed at creating positive environmental and social impact;
- CVS will spend as much as $3 billion on technology and digital enhancements to improve both the consumer experience and its stores; and
- Ulta Beauty has major growth plans outside of its shop-in-shop expansion with Target, which include 50 new store openings each year through 2024, enhanced last mile options and investments in AI and media, including the launch of an in-house retail media network.