Target is one of the biggest e-commerce companies in the US along with the likes of Amazon, Walmart and Best Buy. Now, we know that e-commerce companies are the only ones that are currently operational in these times of the Coronavirus pandemic and we have seen that they are doing a great job at that. It is also a time when customers don’t really have a preference as to where they will shop. It is usually the case of whichever store online has the item in stock, they will buy it from there.
Due to this, we know that stores having lesser online presence such as Target, for example, are doing quite well too. However, the company says that they are still expecting lower first-quarter results even though their sales have increased. The simple reason behind this is that people are buying low-ticket items and it is obvious that they will do so. However, the costs for delivering such products at Target are adding up and that’s a problem.
Target CEO Brian Cornell said the retailer has benefited from investments in online shopping options, but it will have lower profits this quarter. He also said that they are currently spending more on labour in order to deliver as much items as possible. This also means an overhead cost while the profit margin on deliveries are not great. On the news that Target expects lower first-quarter revenue, the stocks for the company went tumbling down by 7% which is what the market tends to do.
The CEO mentions that they are committed to investing in Target’s online presence and he mentions that these “market share gains that I think will benefit the brand for years to come.” It is known that brands such as Walmart, Best Buy and Target had been investing in online space to compete with Amazon and this might be the right time to do so.