CNBC: Target Invests $100 Million to Enhance Its Next-Day Delivery Capabilities
Target announced last Wednesday that it will invest $100 million towards expanding its sorting center network to enhance its next-day delivery capabilities. According to multiple sources, the retailer wants to establish at least 15 sortation centers by the end of January 2026. Target currently owns 9 of them, which are all located in Colorado, Georgia, Illinois, Minnesota, Pennsylvania, and Texas. On average, each hub can retrieve packages from 30 to 40 local merchants and there are about 100 workers at each of these centers.
Over the past 6 years, Target has pursued the strategy of “stores as hubs” but as online sales grew, the stores and backrooms became crowded. That was when Target shifted and started to build sortation centers. This new strategy has freed hubs employees from the sortation responsibility. As a consequence, more time to support in-store customers. The sortation centers have saved "tens of millions of dollars in last-mile expense” for the company, according to Gretchen McCarthy, Chief Supply Chain and Logistics Officer at Target.
She explained that the project won’t serve only for sales growth, but Target wanted to fulfill its mission to satisfy its customer with faster delivery. At the moment, 40% of the packages are delivered to the customers the next day and this number is expected to increase when more sortation centers are set up.
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