Inside Target’s $4 Billion Makeover

Target plans to invest about $4 billion annually in new stores, remodels and fulfillment services as it targets consumers whose shopping preferences have been altered by a once-in-a-lifetime pandemic. Target opened 30 stores in 2020 and now boasts nearly 1,900 U.S. locations. Its goal is to open 30 to 40 new stores a year, ranging from small-format to midsize locations. “Dense suburban cities” like Denver and Brooklyn are on the list, as are sprawling college campuses. Target will open small-format stores at places like University of Georgia and University of Michigan "to introduce its unique shopping experience to college-aged guests." It aims to turn them into lifelong customers. Expanded fresh food and alcohol The retailer also plans to remodel 150 stores before the 2021 holiday season to add more contactless features, same-day fulfillment services and increase social distancing. An additional 200 stores will get makeovers next year. Here's what else is planned: An increased selection of fresh and frozen foodExpanded alcohol pickup at 800 locationsAn updated app with more customer personalization The retailer is also testing out a new way to supplement its 44 U.S. distribution centers with "stores-as-hubs." Increasing speed and efficiency In Minneapolis, it will experiment with new type of facility known as a "sortation center," which will collect online orders from local stores throughout a day and sort them into efficient routes for delivery. Target expects to open five additional sortation centers in 2021. “This process increases store fulfillment capacity, reduces last-mile fulfillment costs and speeds delivery to guests," the company wrote in its statement. It also plans to open distribution centers in Chicago and Delaware this year with two additional centers planned for 2022. That still leaves Target with about half the fulfillment centers of Amazon, which operates more than 100, and Walmart, which has 150. In January, Walmart also announced plans to increase the number of its stores that double as automated fulfillment centers. Additionally, Target is hoping to lure shoppers with its store-within-a-store strategy, which currently includes Ulta Beauty and Apple. Ulta Beauty’s CMO Dishes on Partnership With Target