Target is spending big to improve its stock, online, grocery departments


Target will invest big in making sure customer shopping experiences are easy and enjoyable by making sure everything they need is in one place and – crucially – in stock.

Speaking on Thursday, CEO Brian Cornell said Target will spend up to $2.5 billion in its technology and supply chain divisions in 2017 in order to keep shelves full, online orders fulfilled and to make it easier for customers to order and pick up goods, the Washington Post reports.

It's an increase on the $1.4 billion it spent last year in the same departments. The Minneapolis-based retailer is looking to transform its logistics operations so online purchases arrive at customers' homes sooner without depriving stock in stores. This came after Cornell said last August that empty shelves were hurting performance.

The company was boosted by excellent performance in the fourth quarter, trouncing rival Walmart with a 1.9 percent growth in sales during the three months, and is now looking to capitalize on its recent success.

As well as improving its supply chain to fulfill online orders, Target is looking to optimize its store stocks by removing certain items that are either unnecessary or poor selling.

Fortune notes Walmart has taken a similar step recently, eliminating 15 percent of its products "by doing things like offering a ranch dressing in one size rather than six."

This, it says, cuts down on the number of times an item is out of stock (if one of those said sizes is more popular than others) and reduces the time workers spend re-stocking.

Grocery in line for investment

This could be a crucial element of Target's plans to turn stores into a truly one-stop shop, another key factor in which will be the ongoing transformation in the grocery department.

As KARE 11 puts it: "Target wants to be the store where customers can just as easily buy a blue Star Wars lightsaber as last minute dinner ingredients, a new bikini for spring break, a stylish sports bra or updated accent pillows for a living room renovation. And perhaps refill a prescription and restock on diapers."

To that end, Cornell is pushing ahead with previously revealed changes planned in the grocery department, bringing more organic products, fresh produce and fewer dry goods, the TV station notes.

There's further innovation in its core categories on the way too, with changes to layouts and displays on the way and further collaborations with style and furnishing designers.

Target announced its latest collaboration this week, partnering with Marrimekko for a new line in its style department, having revealed a new line of kids furnishings last month.

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