Executive Briefings

Target's RFID and Fulfillment Investments Lead to Increase in Digital Sales

Year over year, Target says it's surpassed expectations for 2016 thanks to investments in inventory data. Although the third quarter saw a 0.2-percent decline in sales from last year, its comparable digital channel sales grew 26 percent over last year.

Over the past couple years Target says it has been on a journey to drive greater efficiency throughout its organization. These investments have been showing strong improvement, as well as operational efficiencies and costs that the retailer is able to return to the bottom line. At the core of these investments is inventory data, which is key to the retailer's speed and reliability. The retailer has implemented RFID across a portion of its apparel assortment in more than 1,600 stores.

“In affected categories, overall inventory accuracy has increased dramatically, meaningfully reducing the number of occasions in which we can't physically locate an item,” said John Mulligan, COO. “In addition, we've made system changes to optimize replenishment of products that our guests purchase in multiples and made changes to minimum on-hand standards and higher volume locations, both of which have dramatically reduced our stocks on effective items. We will continue to test and rollout these enhancements throughout next year.”

Through redesign of its in-store replenishment processes and algorithms, the retailer says it has delivered significant payroll savings that it can reinvest in service. Two areas that will reap the benefits of this savings are the store pickup process and ship-from-storage capability.

While this is the third holiday season the retailer has offered order pickup in all of its stores, it has targeted for volume to grow another 50 percent over last year. To accommodate the holiday demand, it has added additional holding capacity to more than 80 of its highest volume pickup locations, and invested in scheduling tools and additional digital devices to enable high volume locations to deliver fast service. To underscore the retailer’s commitment to the pickup experience, this year the store team in some 300 high volume locations will wear unique shirts and deliver separately branded reusable bags.

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Over the past couple years Target says it has been on a journey to drive greater efficiency throughout its organization. These investments have been showing strong improvement, as well as operational efficiencies and costs that the retailer is able to return to the bottom line. At the core of these investments is inventory data, which is key to the retailer's speed and reliability. The retailer has implemented RFID across a portion of its apparel assortment in more than 1,600 stores.

“In affected categories, overall inventory accuracy has increased dramatically, meaningfully reducing the number of occasions in which we can't physically locate an item,” said John Mulligan, COO. “In addition, we've made system changes to optimize replenishment of products that our guests purchase in multiples and made changes to minimum on-hand standards and higher volume locations, both of which have dramatically reduced our stocks on effective items. We will continue to test and rollout these enhancements throughout next year.”

Through redesign of its in-store replenishment processes and algorithms, the retailer says it has delivered significant payroll savings that it can reinvest in service. Two areas that will reap the benefits of this savings are the store pickup process and ship-from-storage capability.

While this is the third holiday season the retailer has offered order pickup in all of its stores, it has targeted for volume to grow another 50 percent over last year. To accommodate the holiday demand, it has added additional holding capacity to more than 80 of its highest volume pickup locations, and invested in scheduling tools and additional digital devices to enable high volume locations to deliver fast service. To underscore the retailer’s commitment to the pickup experience, this year the store team in some 300 high volume locations will wear unique shirts and deliver separately branded reusable bags.

Read Full Article