Target Sees Huge E-Commerce Boost During Holiday Season

Need to Know

• The big-box retailer posted digital sales growth of 102% for November and December, compared to the same period in 2019.
• Drive Up, Target’s curbside pickup system, increased more than 500%; Shipt, which is the retailer’s delivery service, increased more than 300%.
• Roughly 95% of orders made over the holiday season were fulfilled by Target stores.

Analysis

Target had a strong digital shopping season over the holidays, with the big-box retailer reporting this week that online sales during November and December 2020 were 102% higher than they had been during the same period in 2019.

Customers showed a strong preference for curbside pickup and home delivery, with the use of Drive Up, Target’s curbside pickup system, spiking by more than 500% year over year. The use of Shipt, which is Target’s home delivery service, increased by more than 300%. Target’s pivot over the course of 2020 to equipping more of its stores to function as fulfillment centers proved fruitful over the holidays, as roughly 95% of online orders were fulfilled by stores.

“The momentum in our business continued in the holiday season with notable market share gains across our entire product portfolio,” Brian Cornell, Target’s chairman and CEO, said of the retailer’s holiday performance. “We’re very pleased with our results, and the strength of our performance is a reflection of the tireless work of our team to support our guests through a safe, convenient and inspirational experience.”

While Target’s digital business was the winner over the holidays, the retailer also saw an uptick in in-store customers, with comparable store sales growing 4.2% in November and December. The average ticket price increased by 12.3%, with the housewares category seeing the highest growth, increasing 20% year over year.

Target worked consistently over the course of 2020 to pivot its business operations toward customer preferences and safety guidelines brought on by the COVID-19 pandemic, specifically by funneling more resources into its digital and fulfillment operations. Just ahead of the holiday season, the retailer reported that it would be focusing its seasonal expansion on e-commerce, primarily by dedicating more seasonal hires towards the fulfillment of online orders. The company also launched an in-store reservation system, which allowed customers to book a slot for in-store shopping in order to avoid lineups, and added nearly 8,000 new parking spots to better facilitate curbside pickups.

Online shopping has spiked for Target throughout the pandemic, with the company reporting it added 10 million new digital customers in the first half of fiscal 2020. The company’s holiday-season digital success is part of a huge surge of customers turning to e-commerce during the holidays in 2020, with Adobe reporting online shopping topped $188 billion over the holiday shopping season, representing what would have otherwise been two years’ growth.