Target reduces costs by 40% through its store fulfilment

Target has begun the move of digital fulfilment from its distribution centres to stores and has experienced a 40% decrease in costs, according to Supply Chain Dive.

In the retailer’s first quarter earnings call, Target CEO, Brian Cornell, said: “When we go from an upstream DC to some of our same-day fulfilment offerings, like Order Pickup and Drive Up, we see a 90% reduction in costs.”

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The firm hopes to fulfil over two-thirds of e-commerce orders from its stores during 2019. Target has begun to remodel around 300 stores annually and hopes to complete 1,000 store remodels by the end of the year in a bid to, according to Chief Operating Officer, John Mulligan, “reconfigure space in operations to support all of our new fulfilment options.”

The company provides same-day fulfilment options such as Drive Up, where online or mobile orders are brought to the customer’s car, as well as in-store order pickup and its partnership with Shipt for same-day delivery service. “Target now offers more digital fulfilment options across more of the country than anyone else in retail” Mulligan commented.