Target boosts stores as hubs strategy with new sortation centres

Target will add three new sortation centres in the next year - two in greater Chicago and one in the Denver metro - as it looks to “power even speedier delivery for our guests, while helping our teams work more efficiently and reducing our shipping costs”.

The new additions will line up alongside Target’s six existing sortation centres across the US.

In an online post, the retailer says: “Sortation centres take orders packed in local stores and sort them quickly and efficiently for local deliveries.”

“They are the next phase of our stores as hubs strategy, helping lower costs and creating efficiencies for our operations while increasing speed of delivery for our guests.”

“That’s important given our digital sales have grown nearly $13 billion from 2019 to 2021, and our stores fulfilled more than 95% of our total sales in 2021.”

“But rather than team members managing packing and sorting packages in a store’s backroom, sortation centres take on the sorting process, saving our store teams time and space so they can fulfil more orders and reach guests faster at a lower delivery cost for us.”

“Plus, sortation centres allow our teams to easily scale to fulfil a growing number of orders, and consolidating orders and batching deliveries add ease for our carriers. And we do it all while staying focused on serving our guests no matter how they choose to shop with us.”

Target’s Minneapolis sortation centre now handles nearly two-thirds of its digital orders in the area.

“We started out delivering several hundred packages per day, and now can deliver tens of thousands on our busiest days with the help of more than 2,000 Shipt drivers, who deliver packages in their personal vehicles,” the online post notes.

“Packages are picked up from our 43 Twin Cities stores twice daily and sorted at the centre for pickup by Shipt drivers and our other carrier partners, who then deliver them to guests’ doors.”

“Now, we’re going one step further, working with Shipt to pilot the use of large-capacity delivery vehicles in Minneapolis.”

“The vehicles can hold up to eight times more packages per route, adding more flexibility to deliver even faster and make room for growing order sizes.”

“And it’s just the start: We’ll continue to test and improve, with plans to scale in the years to come. It’s yet another way we’re investing across our operations to support our teams, build on our strategy and deliver joy for our guests.”

Target says it will continue to invest in its network with additional facilities in new markets in the coming years as it “focuses on building a modern, flexible supply chain that supports our stores, all in service of our guests”.

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