Target Corp. will open four more sortation centers—two in Texas, one in the Philadelphia area and one in Georgia—in a move aimed at helping stores fulfill more online orders and faster.
With the sortation center model, first tested in Target's hometown of Minneapolis last year, store associates pick and pack online orders, and then orders are removed quickly to the sortation center, which batches and routes them for local delivery.
"By removing the sorting process from our backrooms, we save valuable time and space for our store teams to fulfill additional orders," Target said in announcing plans for the upcoming centers. "Because our sortation center technology presorts and arranges packages for easy pickup," the retailer added, "it reduces processing time for our delivery partners, too." The result, Target said, is faster delivery and improved fulfillment efficiency.
The four new centers will open starting this fall in Dallas, Houston, the Philadelphia metro area and Lawrenceville, Ga. No specific timeline for the openings was announced, but Target Chief Operating Officer John Mulligan said Aug. 18 that two centers will open this fall, and two more will open after the holidays.
Target executives frequently have cited the company's stores-as-hubs model as a key driver of success in building out its e-commerce channel and highly rated same-day services; Target stores fulfill 95% of the company's online orders. In its second-quarter earnings release this week, Target reported that sales from same-day services, including delivery via Shipt, increased 55% year over year, following 270% growth in the year-ago quarter.
Adding additional capacity at the store level to fulfill these orders quickly and continue to improve the same-day-services experience for guests will yield results in terms of even more "Target runs"—both online and in-store, Target believes.
"Digital engagement drives more engagement in our stores," Target Chief Growth Officer Christina Hennington said during the company's earnings call Aug. 18, stating that guests who try Target's same-day services wind up spending more in-store down the line.
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