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Target grows its buy online, pick up in store business 50%

August 18, 2016 03:38 PM
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Online shoppers are increasingly picking up their orders in Target Corp.’s stores.

The number of orders picked up in store has increased 50% year over year through the first half of 2016, chief operating officer John Mulligan told analysts on the retail chain’s second quarter earnings call Wednesday. To accommodate that growth, Target is making strides to ensure its stores are ready for the holiday rush.

“In 75 of our highest-volume stores, we are increasing holding capacity to allow our team to retrieve items more quickly even during peak times,” he told analysts on the call, according to a transcript from Seeking Alpha. “We are also investing in additional digital devices to support peak demand and across all of our stores. We are rolling out new guidance on how our stores can optimize their storage space to enhance speed and efficiency.”

At 300 stores during the holiday season, employees who are responsible for fulfilling online orders will wear white shirts that say "order pickup" on them, while other Target employees will continue to wear the standard red t-shirts. Web orders picked up in store will be placed in reusable bags that read "here's a little pick-me-up," according to a Target spokesman.

Target, No. 22 in the Internet Retailer 2016 Top 500 Guide, reported that online sales accounted for 3.3% of sales during the quarter ended July 30, or $533.6 million, up 13.4% from $470.5 million in the same period last year, when online accounted for 2.7% of overall sales. Through the first half of 2016, e-commerce accounted for 3.4% of sales, or $1.10 billion, up 13.7% from $967.3 million last year.

During the quarter, the retailer relaunched its website, incorporating responsive design to better serve mobile shoppers. According to data from web analytics company SimilarWeb, mobile visitors accounted for 62.34% of all visits to Target’s site in the past year.

“We now provide a seamless experience across all platforms from desktop to tablets to smartphones,” CEO Brian Cornell told analysts. “This is increasingly important because for many guests—a single purchase journey crosses over two or more of these digital devices.”

For the fiscal second quarter ended July 30, Target reported:

  • Net sales of $16.169 billion, down 7.2% from $17.427 billion last year.
  • E-commerce sales of $533.6 million, up 13.4% from $470.5 million last year.
  • A comparable sales decline of 1.1%.
  • Net earnings of $680 million, down 9.7% from $753 million last year.

For the first six months of 2016, Target reported:

  • Net sales of $32.364 billion, down 6.3% from $34.546 billion last year.
  • E-commerce sales of $1.10 billion, up 13.7% from $967.3 million last year.
  • Comparable sales were flat year-over-year.
  • Net earnings of $1.312 billion, down 5.5% from $1.388 billion last year.
 

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