Target Unleashes More Precise Delivery Windows As Its Latest Weapon In Ecommerce
By Christine Kern, contributing writer
Faster delivery turnaround time could prove lucrative in Target’s battle with Amazon.
Target has begun testing a shorter, more precise delivery window for its customers. Called “available to promise,” the new program will keep customers informed of their order’s progress and aims to narrow delivery to within two to three days.
The retailer is leveraging its stores to help with fulfillment, and says it will use 450 of its 1,800 stores nationally by the holidays to fulfill orders as quickly and efficiently as possible.
When CEO Brian Cornell took the reins a year ago, he faced some monumental challenges to make the retailer successful. Target under CEO Brian Cornell is clearly intent on catching up to Amazon and Wal-Mart Stores when it comes to e-commerce. Cornell plans to “reinvent Target as a more nimble force amid fierce competition,” according to US News.
In March, Cornell presented plans to improve Target’s business in what he called “a roadmap to transform business,” which includes more guest-focused approaches, prioritization of certain merchandize categories, and a channel-agnostic approach.
“Following a thorough, strategic review of our business, coupled with a careful evaluation of the changing retail landscape, we have identified the key initiatives that will put Target on a clear path to growth,” says Cornell. “We’re focused on our future and building the capabilities that will take us further, faster. Redefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do.”
Its Q2 digital sales rose 30 percent, a positive sign but still below Cornell’s goal of 40 percent. Target has committed a billion dollars to improvements and innovations to reach that goal, including the “available to promise” pilot, which aims to bring the level of transparency delivery of orders that many customers are coming to expect.
“Available to promise” (ATP) is actually a lean manufacturing concept that is being applied to retail, and is an important concept in supply chain management.
Target already lowered the minimum amount required to qualify for free shipping back in February, and the new shorter delivery time is anticipated to help boost online sales.
Currently, delivery windows run an average of seven to 11 business days; the new available to promise program would shorten that range to one or two days in an effort to make consumers aware of when their packages should arrive, but also to boost sales by eliminating some of the uncertainty associated with online ordering.
“We believe this capability will drive further increases in digital conversion rates, which are already improving rapidly, as guests respond to a faster and firmer delivery commitment,” Target CEO Brian Cornell said.
Target has worked to shorten delivery times by using the merchandise from its physical stores to complete online orders, Cornell said, and the company currently fulfills online purchases at 140 stores. That number will be boosted to 450 stores to meet fulfillment needs this upcoming holiday season.
“We want to give them the confidence when they order, they know it’s available to promise and we’re going to have it there for them when they need it,” he said.