Imagine a world where the products you need arrive at your doorstep faster than ever, no matter when or where you order them. Behind this seamless experience lies a highly efficient, intelligent supply chain. Retail giant Target is reshaping its logistics network through bold investments and innovative strategies to deliver unparalleled convenience to customers.
At the recent CSCMP EDGE conference, Gretchen McCarthy, Target’s Chief Supply Chain and Logistics Officer, revealed how the company is investing $7 billion to transform stores into fulfillment hubs and $100 million to build a robust last-mile delivery network. Here’s an inside look at how Target maintains its competitive edge in retail.
Stores: The Powerhouse of Fulfillment
Target recognized early that its nationwide store footprint was a strategic advantage. McCarthy noted that 75% of Americans live within 10 miles of a Target store. To leverage this, the company invested heavily in remodeling stores to double as high-efficiency fulfillment centers. The $7 billion initiative expands fulfillment options and services, enabling faster, cost-effective deliveries while boosting customer satisfaction and operational efficiency.
Sortation Centers: Optimizing the Network
Target is allocating $100 million to expand its sortation center network to 15 locations by 2026. These facilities consolidate packages from 30-40 stores before routing them to regional carriers or Target’s last-mile network, powered by Shipt drivers. This hyperlocal approach accelerates deliveries, increases next-day shipments, and reduces costs. It also shifts workload away from stores, freeing employees to focus on customer service.
Shipt: Supercharging Last-Mile Delivery
Target’s wholly owned subsidiary, Shipt, is fully integrated into its last-mile operations. McCarthy explained that real-time routing allows Shipt drivers to select optimal delivery paths. With thousands of drivers on the platform, Target achieves rapid, flexible deliveries while maintaining tight control over the customer experience.
A Customer-Centric Supply Chain
Every Target supply chain decision prioritizes customer needs. The company even conducts special training to remind fulfillment teams that each package represents a real person. This philosophy aligns with Target’s mission to help families find joy in daily life while motivating employees.
Streamlining Operations for Efficiency
Target simplifies workflows to reduce burdens on store teams. Improved trailer forecasting, for example, prevents unnecessary multi-store shipments from distribution centers. Enhanced inventory management gives employees more time to assist customers rather than manage stock.
Automation: Strategic Enhancements
With two decades of automation experience, Target carefully implements technology that complements—rather than replaces—human workers. Current systems strategically sort cartons to stores, improving unloading efficiency and workplace safety. McCarthy emphasizes that upstream automation delivers the greatest supply chain benefits.
Balancing Inventory Intelligence
Target focuses not just on physical stock but inventory movement. Virtual inventory tracking ensures optimal flow, with safety stock adjusted for seasonal demand. Post-pandemic, the company prioritized visibility tools and supplier collaboration to enhance reliability and service.
Future-Proofing the Supply Chain
Despite improving macroeconomic conditions, McCarthy stresses the need for vigilance. Target continues investing in its supply chain to maintain resilience and flexibility amid uncertainty, ensuring it meets evolving customer expectations in a competitive market.