Target has set an ambitious goal: achieving $15 billion in revenue growth by 2030. To accomplish this, the retailer is focusing on expanding its third-party marketplace, enhancing its media network, and improving same-day delivery services. The plan comes as Target faces stiff competition from Walmart and Amazon while also working to revitalize its sales and regain its competitive edge.
Aiming for a Stronger Online Presence
Target is doubling down on its online marketplace, aiming to increase third-party digital sales from $1 billion in 2024 to over $5 billion by 2030. Unlike Amazon and Walmart, which have embraced a wide-open approach to third-party sellers, Target is taking a more curated route.
“Rather than opening the doors to any seller, we’re focused on building relevance and trust by working with partners that complement our assortment and also help us provide more of the breadth consumers are looking for,” said Rick Gomez, Chief Commercial Officer.
To achieve this, Target is inviting well-known brands like Peloton, Daily Harvest, and Honest Baby Clothing to its platform. Chief Guest Experience Officer Cara Sylvester emphasized the company’s unique strategy, stating, “To be clear, we still believe our intentional, invitation-only approach is the right strategy, both now and in the long haul for Target. But that hasn’t prevented us from massive growth. Target Plus now generates over $1 billion in [gross merchandise value], having grown more than 35% in the past year alone.”
Growing Target’s Media Network
Another key aspect of Target’s strategy is expanding its in-house media company, Roundel. In 2023, Roundel generated more than $2 billion in value, and the company aims to double its size by 2030. This mirrors Walmart’s approach, which has leveraged its advertising platform, Walmart Connect, as a major revenue driver.
Improving Product Offerings and In-Store Experience
While digital growth is a major focus, Target is also addressing concerns about its in-store experience. The company has faced criticism for a decline in product freshness and inventory management issues. Chief Operating Officer Michael Fiddelke stressed the importance of getting back to retail basics.
“There are some forever truths in retail. One of them is, retail is about product, and the best product at the best value wins. And when you can find that fantastic combination of newness, style, and value at Target, we win.”
Target plans to expand its gaming, sports, and toy selections while enhancing its home and pet product lines. Additionally, it will launch 600 new food and beverage items under its private-label brands, Good & Gather and Favorite Day, including collaborations with celebrity chefs like Ann Kim.
Enhancing Supply Chain and Delivery
To remain competitive, Target is investing between $4 billion and $5 billion annually in store improvements, supply chain enhancements, and technology upgrades. These investments include modernizing its inventory system with AI-powered solutions to minimize stock shortages and speed up deliveries.
“We know there’s no Tarzhay magic if you can’t find the item you were looking for because we were out of stock or we didn’t delight you in store,” Fiddelke noted.
Target also plans to streamline its apparel supply chain to bring products to market faster and better compete with fast-fashion giants like Shein and Temu.
Expanding Store Locations
Despite its focus on e-commerce, Target is still investing in physical retail. The company plans to open 20 new large-format stores and renovate existing locations to improve customer experience.
Target’s aggressive expansion strategy aims to boost online sales, strengthen its media business, and enhance its in-store shopping experience. By focusing on digital transformation, curated third-party partnerships, and operational improvements, the retailer hopes to reclaim its status as a top shopping destination. If successful, these efforts will drive substantial revenue growth and solidify Target’s competitive position in the retail industry.