Target Tests Facility to Bring Customers Next-Day Shipping

The retailer said it would spend $100 million to enable next-day shipping.

June 22, 2023

Target is piloting an extension facility that would give the retailer the ability to offer next-day shipping, reports CNBC. The facility is located in Smyrna, Georgia, about 16 miles northwest of Atlanta, and Target may open them in other cities. Target will utilize its Shipt delivery service to bring customers their orders next day through the app’s network of gig workers.

According to Target, more than 96% of the company’s online orders are fulfilled at stores. Earlier this year, Target said it would spend $100 million over the next three years to build up its supply chain network to support next-day shipping. The retailer has also opened nine supply chain facilities, which Target calls “sortation centers,” that will improve the efficiency of its online order shipments. Target wants to have 15 of these locations by the end of January 2026.

Target said the extension facility will bring next-day delivery within reach of 500,000 more customers near Atlanta. Currently, it can provide next-day delivery to a total of three million people in the Atlanta area.

Target’s digital sales were down 3.4% year over year, not unlike the sales of other major retailers including Costco, Best Buy and Kohls. These sales trends are in response to consumers’ decrease in discretionary purchases. However, Walmart saw its online sales increase by 27% year over year in the first quarter.

Walmart recently opened its largest fulfillment center to date and is designed to expand access to the retailer’s next- or two-day shipping. The fulfillment center is the second of four next-generation facilities Walmart plans to open. These locations combine people, technology and machine learning to achieve faster shipping and delivery, says Walmart.