The delivery arms race is on, and Target is using all its ingenuity to compete against larger rivals like Amazon and Walmart. The retailer has come up with a way to use resources and technology from companies that Target already owns to speed up the delivery process, starting in its hometown of Minneapolis.
The new approach involves Target employees picking and packing online orders from their stores. From there, the packages will be transferred to a sortation center, where technology acquired from Deliv and Grand Junction is put to use. This technology calculates efficient routes and groups packages accordingly. Then, contract workers for Shipt, another Target acquisition, will deliver the packages.
This approach will not completely replace the role of traditional delivery companies such as UPS and FedEx in Target's operations, but it will lessen Target's dependence on such companies, which are coping with a massive spike in volume.
“Shipping is the majority of the cost for getting a product to a guest. Shipping is the big number,” Target’s chief operating officer, John Mulligan, said in an interview.