You must be aware that some of the biggest players in the US e-commerce industry are the likes of Amazon and Walmart and others are still trying to play catch-up because of the dominance of these two major players. However, they are also major players in the traditional commerce sector and have dozens of brick-and-mortar stores all across the US. This is the reason why they can also invest in their own infrastructure and become a major player in the e-commerce sector as well. One such major player is Target which is trying to ramp up its e-commerce division and the latest report suggests even more of that.
In the latest report by CNBC, it is revealed that Target is investing $100 Million in developing hubs for its e-commerce delivery. This is their bid to make e-commerce delivery faster which is one of the major reasons why e-commerce players like Amazon have made it so big due to their Prime delivery system. Talking about hubs, these are warehouses from where the products are dispatched for delivery. For an e-commerce company, the delivery will be faster if hubs are closest to the location from where delivery has to be made. For that reason, more hubs need to be made and investment is needed for the same.
Target said that with the $100 Million investment, it plans to develop 15 such facilities which it calls “sortation centers” by the end of January 2026. More than 100 people will work at each sortation center which means it will create more than 1500 jobs as well. At the same time, Target has revealed that it is projecting a slowdown in sales and also plans to cut “up to $3 billion in costs over the next three years”.
One of the reasons why every company is reporting a decrease in sales is also due to the extreme rise in online sales during the pandemic which can’t be replicated anytime soon because those were unprecedented times as everyone was at home and ordering whatever they wanted without any care in the world. Target claims that currently they are able to deliver their orders the next day but they want this time to be even shorter going forward.
