Target to Offer Free Shipping on All Online Orders
October 29 2015 - 6:29PM
Dow Jones News
By Paul Ziobro
Target Corp. is bringing back free shipping on all online orders
for the holiday season, the second straight year Chief Executive
Brian Cornell has turned to the strategy to boost digital
sales.
The shipping strategy is a key point of difference during the
holiday season between Target and rival Wal-Mart Stores Inc., which
said on Thursday that it will continue to charge a shipping fee for
all orders of less than $50. Best Buy Co. last week said it would
drop shipping fees on all orders through early January.
Mr. Cornell is leading his second holiday season at Target,
though this year's holiday shopping event will the first that bears
his full imprint. His tenure atop the retailer started in 2014,
with most of the company's holiday plans already having been
set.
One of the main changes for which he pushed last year was
dropping shipping charges during the holidays, part of Target's
goal to boost its digital business and better compete with online
rivals like Amazon.com Inc. Free shipping helped Target boost
digital sales 36% during last year's fourth quarter.
Mr. Cornell is hoping to grow Target.com's sales at a 40% annual
clip over the next five years. The retailer, though, has fallen
short of that mark in the two quarters since announcing the goal,
meaning it has to make up ground the rest of this year. Digital
sales were less than 3% of Target's business through the first half
of the year.
Target's broader holiday plans include improving the quality of
home décor and apparel, as well as sprucing up displays in key
areas of the stores. Target is also launching an online site to
sell its products to over 200 countries and adding new ways of
selling products, with curbside pickup available at 121 stores next
week.
Mr. Cornell acknowledged on Thursday that the holiday season is
unfolding at a time when shoppers remain cautious and the battle
for shoppers remains fierce. "We're going to have to fight for
every dollar, " Mr. Cornell said in an interview at Target's New
York office.
Though Target is now incorporating real marble into cutting
boards and selling hand-crafted serving trays, improvement in
quality hasn't boosted prices. "The core assortment throughout the
store is better quality, not higher prices," said Jeff Jones,
Target's chief marketing officer.
Thus far, changes in other departments have paid off. Putting
apparel on new mannequins, for instance, has boosted sales of those
items by 30%, while dinnerware and furniture featured in Target's
restaged home area sell three to four times faster than the rest of
the category, the company says.
Though the plan has been communicated from the top, Target's
stores will have to carry it out, including making sure that items
are in-stock, a major problem the retailer is beginning to tackle.
"Now it's execution time," Mr. Cornell said.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 29, 2015 18:14 ET (22:14 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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