Do Americans think that Target is the easiest place to shop?
Target was focused on becoming the easiest place to shop for Americans well before the novel coronavirus pandemic changed so much of how they live their lives. When COVID-19 hit, Target used its same-day services and local fulfillment options to attract millions of new customers, driving record quarterly results in the process.
The retailer announced that it posted sales to record new levels a 24.3 percent gain in same-store sales as digital comps skyrocketed 195 percent and physical locations posted a 10.9 percent gain.
Sales from same-day services (Order Pick Up, Drive Up and Shipt) grew 273 percent. Target’s drive up service saw the biggest percentage growth at 734 percent during the quarter.
“Our stores actually drove more than 90 percent of our second-quarter growth,” said Target CEO Brian Cornell on the retailer’s earnings call yesterday. “Given that they enabled more than three-quarters of our digital sales and an even higher percentage of our digital growth, store base fulfillment is uniquely suited to our business model because of the way it fits within our overall strategy. In particular, it aligns with our merchandising approach, which is based on curation, both in our stores and online assortments.”
Target said it has picked up “unusually strong” gains across its five core categories.
Apparel, which was down 20 percent in the first quarter was up 40 percent in the second. Consumer electronics were up 70 percent, the home category gained 30 percent and beauty, which increased 10 percent in the first quarter, doubled that over the latest three months.
Sales of the food/beverage and essential goods categories were up 20 percent, below the first-quarter rate, as consumers did less stocking up than when the pandemic first hit. Mr. Cornell touted the success of the “Good and Gather” private grocery label with sales at more than $1 billion in its first year.
Target’s CEO also discussed the retailer’s upcoming plans.
The chain is extending its back-to-school merchandising with many households uncertain if kids will be returning to physical classrooms, learning remotely or some combination of the two.
Mr. Cornell said Target will offer Christmas deals beginning in October “so guests can shop safely and conveniently, without worrying about missing out on deals that usually come only late in the season.” The retailer will also add “thousands of additional items” to its list of same-day service items.
