Abstract
This study aims to explore the strategies and platforms that Target Corporation is utilizing to maintain its competitive advantage with e-commerce giants like Amazon and Walmart. It examines strategies such as the use of same-day product delivery, fostering digital innovation, investing in private labels, and leveraging physical stores to achieve online success. It compares Target with Walmart and Amazon based on the approaches employed, sales made, and their current market position.
Unlike the two corporations, Target operates only in the US, where it has more than 1900 physical stores to cater to the needs of its clients. It has many brands across various industries, enabling it to offer a wide range of items to its online customers. The research indicates that the multifaceted approach employed by Target has enabled it to expand its consumer base, increase sales, and maintain competitiveness. It concludes by recommending that this firm consider international expansion, invest in technology, incorporate data analytics, and prioritize sustainable efforts.
Background
The advancement of technology since the beginning of the 21st century has had a significant impact on various aspects of life. For example, recent statistics indicate that approximately 4.54 billion individuals worldwide are active internet users. This accounts for 59% of the entire population (Dwivedi et al. 6). Today, people utilize these innovations in various fields, including education, commerce, entertainment, transportation, communication, and more. In the business sector, these advancements have been significantly embraced.
For instance, “digitalization is increasingly shaping the way firms conduct business within and across borders” (Ahi et al. 27). Examples of the way they incorporate it in their activities include enhancing productivity, aiding their internationalization, creating new or transforming existing models, and improving interactions with other stakeholders, such as customers, suppliers, and partners. Therefore, companies are at a point where they have a tool that would enable them to utilize new entrepreneurial opportunities.
Since the outbreak of COVID-19 in 2020, e-commerce has become part of human life. This period saw many brick-and-mortar stores closed or forced to operate with limited space (Verhetsel 2). This has led many customers to turn to online platforms to purchase their products and communicate with sellers. In this constantly evolving landscape, the retail industry has undergone significant changes.
For instance, top retail giants like Amazon and Walmart have become market leaders, as many buyers prefer them (Dwivedi et al. 5). The two companies are continually striving to capture a larger market share in various countries. However, “Amazon has 39.5% of online market share in the US compared with Walmart’s 7%, according to estimates by research firm eMarketer” (Repko, par. 5). Target, an American retail corporation, has also entered this struggle to outshine the two business organizations.
Scope and Limitation
This research aims to examine the platforms and strategies that Target Corporation employs to remain competitive with Amazon and Walmart’s e-commerce operations. Amazon has been the online market leader for many years and has managed to set high standards for digital retailing. On the other hand, its competitor, Walmart, has leveraged its significant physical presence to expand its customer base and rapidly utilize the internet to offer products (Repko).
The research will delve into the initiatives that Target is utilizing and compare them with those of top enterprises, such as Amazon and Walmart. Its scope is not exhaustive, but it will offer a vivid description of the organization’s efforts. However, some limitations may affect its goal, such as the timeframe and the inability to access quality data.
Discussion
The discussion section delves into the strategies and platforms that Target Corporation is using to ensure it remains competitive in the e-commerce sector alongside Amazon and Walmart. It explores various initiatives the firms have utilized so far and how they have implemented and benefited from them. This includes their effects on online sales and customer satisfaction in comparison with the two retail giants. To justify its efforts, the study will utilize various resources and offer summaries of its findings.
Methodology
This paper uses a multifaceted method to comprehensively discuss the e-commerce initiatives that Target has implemented to remain competitive. The research incorporates quantitative and qualitative information obtained from a thorough review of journal articles, reports, and industrial analyses. These will offer a better understanding of the approaches the firm takes and why they are working. Moreover, it examines Target’s past sales results, current efforts, and future focus. Tables, figures, and other diagrams will explain all these and make them easier to apply.
Leveraging Physical Stores to Push E-Commerce
Target has been in the market, operating as a brick-and-mortar store that offers goods from various producers. With the COVID-19 pandemic driving people away from physical shops and organizations seeking better ways to reach their customers and maintain sales, e-commerce remains the only viable option. Target has shifted most of its operations to online platforms to continue being competitive and stands a chance of outshining retail giants like Amazon and Walmart (Repko). Unlike most top organizations in this industry, Target has numerous in-person outlets where it stores its products and uses them to make its operational changes more efficient and credible.
To win the e-commerce battle against Amazon and Walmart, Target has increased its online presence and the number of physical stores. Since its founding, the firm has been working diligently to establish as many brick-and-mortar outlets as possible and reach a wide range of consumers across the United States. While Amazon and Walmart have a strong global customer base, with most of their customers being loyal to their brands, Target performs relatively well in maintaining its physical presence (Chopra). For instance, it has 1,948 locations, which is higher than Amazon’s but far lower than Walmart’s.
The higher number of physical stores implies that Target has the potential to compete effectively with e-commerce. Target’s outlets play numerous roles, including distribution, showrooms, and customer touchpoints. Using these multiple locations, it can offer its clients faster, cheaper, and more convenient delivery and pickup of products (Chopra). Additionally, when customers purchase some items online through their phones or laptops, they always demand instant access.
This means that they will require information about its real-time stock availability and want guaranteed, reliable order fulfillment (Dwivedi et al. 5). Therefore, with the several shops distributed all over the US, Target can manage its inventory effectively and ensure that what it needs is obtainable at its preferred time. This strategy will push this firm to the highest levels in the coming years.
Investments in Its Private Brands
Over the years, Target has made strategic investments in other firms to facilitate their growth and success. The corporation’s initiative to build private labels had roots in 1995 when it introduced Archer Farms as its first-ever owned food brand (Monteros). This new enterprise initially offered essentials like bottled water, pasta, milk, and bread.
However, as time passed, Target began expanding its assortment of these companies. It launched others, such as Heyday in electronics, Cat & Jack in kids’ apparel, and Room Essentials in the home space (Monteros). Ultimately, it met an astonishing goal, currently having 48 of them on its roster. Out of these, ten are worth a billion dollars in market share (Monteros). This enables Target to reach a wider range of customers and increase sales.
Target uses these private labels to stay competitive with Amazon and Walmart in the US market. This strategy has enabled the firm to differentiate itself from its competitors, maintain customer contact, nurture loyalty, and drive significant revenue growth. For instance, “during the first quarter of 2021, Target nabbed $1 billion in market share, and its private label brands rose 36%, the strongest growth the retailer has recorded” (Monteros par. 3). By having these organizations, Target will have a variety of products in the store, such as home goods, apparel, and beauty and customers will be able to buy them via the internet.
The effort to invest in private labels has shown results, as the organization is increasingly recording sales. For instance, since 2017, they reported a 30% rise, reaching $94 billion in 2020 (Chopra). Target ensures that the brands sell products only at its locations, creating a “Target Effect” (Repko). It builds on identifying what works and developing a strategy for manufacturing it at a lower cost. They offer high-quality products at affordable prices to customers worldwide. This also makes them less reliant on third-party vendors that sometimes might be short of supply.
Offering Same-Day Delivery
Target also employs a same-day delivery strategy to remain competitive with Walmart and Amazon. As the two retail giants continually strive to meet the one-day window, Target has gone beyond expectations to do so in hours (Moran). In this new approach, the company offers its buyers three options: online purchase and in-store pickup within a short period, in-store pickup, and home delivery from the store using Shipt. Shipt is a last-mile delivery organization that Target acquired in 2017 (Moran). Figure 1 illustrates the entire process, from the customer placing an order to receiving their goods within a short period (Carollo). They pick up their products from either the corporation’s or from a specified point. They are sorted and prepared for them, and then informed of the next steps to take.
Today, many consumers would abandon their order if it were not delivered on the same day. For instance, the chart below shows that many consumers prefer retailers who deliver products within hours. Those who purchase gifts and flowers require immediate obtaining (Saleh). While buyers for pet supplies show a lower percentage of consideration of immediate access to their products, this initiative still seems conducive for some of them. Therefore, it attracts clients and nurtures a relationship built on trust.
Fostering Digital Innovation
A few years ago, Target Corporation was significantly behind in terms of its customer base and the products it offered. However, today, the company has not only managed to increase its competitive position but also introduced top-notch innovations in food and beverage, as well as omnichannel solutions (Moran). This has given it an advantage over traditional groceries and other retailers dominating the market. This enables Target to offer one-stop shopping, affordable products, and experiential retail, both online and in-store (Moran). It has designed the whole experience to be different from others and create an emotional connection with buyers.
One form of innovation is the acquisition of many digital startups to facilitate its e-commerce operations. For instance, Target acquired the shift delivery platform to help ensure products like grocery items and other daily products, such as flowers and household items, are delivered on the same day (Moran). Now, when someone wants to buy a product from Target, they must download the app and select the preferred option. Other instances include acquiring transportation technology firms such as Grand Junction, Elementium, Powered Analytics, and Deliv (Chopra). These have enabled Target to ensure that customers receive products on time and manage inventories effectively; they leverage data analytics and personalize product recommendations.
Target also has other minor strategies and platforms that have enabled it to maintain its competitive position against Walmart and Amazon. They include offering rewards to their customers through loyalty programs, operating in a selective marketplace, utilizing multiple channels, and more. These approaches play a significant role in enhancing Target’s profitability. For instance, in Figure 3, Amazon, Target, and Walmart all recorded significant sales growth. With the tremendous efforts made over the years, Target grew by 29% after leaping 155% in the 3rd quarter. On the other hand, Amazon and Walmart recorded 15% and 8% respectively (Chopra). Therefore, Target’s recent reports suggest that its efforts are yielding positive results.
Results
The findings of this research confirm that Target Corporation employs multifaceted strategies and platforms, including same-day delivery, investment in private brands, fostering innovation, and leveraging physical stores to drive e-commerce growth. Over the years, it has expanded its operations nationwide by launching an extensive physical store network. This has significantly influenced its sales and accelerated the growth of its customer base. For instance, after 155% in 2019, Target recorded a 26% growth in sales (Chopra). This implies that when customers are guaranteed convenience and safety, they tend to start trusting and being loyal to the brand.
The company leverages its physical store to help it become competitive in the e-commerce sector. Target has made significant efforts and currently has more than 1,900 stores throughout the US to aid in picking up products, distributing them, and showcasing items (Moran). It enables them to offer faster, cheaper, and more convenient delivery. Other advantages associated with these outlets include effective inventory management, affordable products, and the creation of an omnichannel experience that seamlessly integrates both models.
Target’s same-day delivery strategy has attracted many customers across the US. Target often gives its clients three options to receive products: Order Pickup, Drive Up, and Same-day delivery. After acquiring Shipt, it viewed it as an opportunity to ensure buyers receive their items on time, thereby building trust and loyalty (Moran). For individuals who prioritize speed, safety, flexibility, and convenience, using Target becomes the preferred choice. Ultimately, this reduces shipping costs and increases overall sales and revenue. Other results of the research include fostering digital innovations and rewarding people with loyalty programs.
Conclusion
Target Corporation has strived to maintain competitiveness with retail giants like Amazon and Walmart. In the ever-evolving e-commerce landscape, new companies are entering the market daily. It has implemented several strategies, including same-day delivery, customer rewards, digital innovation promotion, investment in private brands, and leveraging physical stores to support its online success. Help the market adapt and innovate to ever-changing customer preferences and complexity. For example, during the COVID-19 pandemic, people were unable to visit physical retail locations to shop, so they had to shop online instead. Target took this opportunity to address its issue of buying and receiving items after hours.
Recommendations
The first recommendation that this research suggests is a significant investment in e-commerce technology. While many business organizations dream of becoming retail giants, it takes strategic ones to allocate more funds for implementing cutting-edge innovations that enable online operations (Ahi et al. 5). This will enable a firm like Target to offer a seamless and efficient shopping experience to its clients. It includes integrating an innovative supply chain, enhancing the functionality of the website and app, and utilizing AI and augmented reality to improve customer engagement with the brand.
The second recommendation of Target is to develop a plan for international expansion. As mentioned earlier, Target primarily focuses on the US market, which appears to limit its market reach. While its sales have increased in the last financial year, it would make sense for it to extend its operations beyond borders. Entering a new market will diversify Target’s customer base and reduce its dependency on the domestic population (Ahi et al. 6). This will enable the company to adapt successfully to the different cultures and economic landscapes of other countries.
Target must also focus on implementing sustainability initiatives in all its operations. It can decide to develop and promote more private labels whose activities are environmentally friendly and are conscious about their surroundings. With the increased concern about climate change, people today choose companies whose values and operations are not affecting their environment in any manner (Ahi et al. 3). Other recommendations include leveraging data analytics to deliver personalized customer experiences, examining consumer privacy and data security challenges and opportunities, and more (Dwivedi et al. 12). These suggestions form a foundation for future studies that would allow Target to maintain a competitive advantage with Amazon and Walmart.
Works Cited
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Chopra, Kunal. “What Target is Doing Right in the Pandemic Era E-Commerce Race.” Forbes, 3 February 2022.
Dwivedi, Yogesh K., et al. “Setting the Future of Digital and Social Media Marketing Research: Perspectives and Research Propositions.” International Journal of Information Management, vol. 59, 2021, p. 102168.
Monteros, Maria. “Target Shaped Private Labels into Powerhouse Brands. Now Others Want to Do the Same.” Retail Drive, 2021.
Moran, Catherine Douglas. “Target Offers More Details on its ‘Secret Sauce’ Delivery Strategy.” Grocery Dive, 2023.
Repko, Melissa. “Walmart is Using its Thousands of Stores to Battle Amazon for E-Commerce market share.” CNBC, 2022.
Saleh, Khalid. “The Importance of Same Day Delivery – Statistics and Trends.” Invespcro, 2023.
Verhetsel, Ann, Joris Beckers, and Jeroen Cant. “Regional Retail Landscapes Emerging from Spatial Network Analysis.” Regional Studies, vol. 56, no. 11, 2022, pp. 1829-1844.