Inside Target’s Strategy to Beat Amazon and Walmart’s Fast Delivery | WSJ Shipping Wars
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- Опубліковано 31 тра 2024
- Target uses its almost 2,000 stores to deliver 95% of its online orders. Now it’s ramping up its shipping speed by investing $100 million in local sortation centers to keep up with companies with strong e-commerce like Amazon and Walmart. Target’s strategy is a big departure from how retailers typically fulfill online orders - using giant warehouses to ship packages across the country.
WSJ visits Target’s first sortation center to explore its store-centric strategy.
Chapters:
0:00 Target’s biggest asset
0:55 Process and strategy
6:06 Can Target catch up?
7:23 Challenges
#Target #Delivery #WSJ
As a current employee, as far as the company has come, Target is far behind the likes of Amazon when it comes to the implementation of tech, automation and AI into its stores and ship-from-store process. Target, largely, still loads and unloads their trailers manually, a box at a time. I cannot stress how ancient that method is and it's very frustrating for those of us who work there.
Probably a long term play, technology continues to improve. Let the major competitor spend the money for it. Buy it when it’s perfected or near
You mean to tell me the trailer doesn’t come in pallets ??
Do you literally pick a box at a time? What the fung
@@sonidoacuario845 you are correct. unfortunately. Literally a box/item at a time. BEYOND infuriating when we know we're competing with the likes of Amazon & Walmart.
@@matthewremache667 in theory I understand what you're saying, but in reality, I think it's more realistic that you'll get left behind before you have the chance to realize just HOW behind you truly are. Target, like walmart, has a huge benefit in the fact that they have stores all over the U.S. But even Walmart has pulled away from Target in terms of implementing technology into their stores to make everything more efficient. There was a car commercial years ago who's point was essentially that if you aren't ahead, you're behind. That's just how it is now. And mind you that commercial was probably 15 years ago - so now add in the advances in technology in the last 15 years and you'll see how behind you can quickly become.
I cant believe they manually with hands have to direct where each packet goes and continues on what path based on what is written on the package - that's insane. Machine should be sccaning the generated bar code and distribute it automatically. I have no idea why that supply chain manager is so happy about their supply chain :D
Yeah with all the millions in savings they were bragging about there is no excuse not to have an automated package sorter.
Simply because the Bots haven't been unleashed on the Human workforce as of yet... wait for it... it's coming in 2024. Many will lose their "Manually Sorting" JO-B.S.
they would have already done it if it's cheaper. it's more expensive to unneccessarily automate and AI same as when tesla tried with model 3 they had to switch back to humans
On the bright side, those are jobs for people
@@jadenpark7943 This kind of system could be easily built by a bunch of students...
I sure hope Katie Johnson agreed to have her address and order number blasted on the internet (assuming Johnson is a real person)
That was my exact thought
I was surprised i had to scroll this far to find this comment.
Its fake, checked on google maps
This feels like Target paid WSJ to film this, to improve their image and stock price 😂 Walmart does the exact same thing except instead of 1 ship station rack its 4 or 5 shipping stations within a store.
I live in Brooklyn, NY and there are two large Target stores within half-a-mile from my apartment. While ordering online with free shipping from Amazon is convenient, sometimes ordering online for in-store pickup at Target is much, much easier - especially when it's for a tube of toothpaste or something like that.
I'm in nyc as we'll, Target is much better at delivering Amazon suck's at deliveries.
As someone who works in order fulfillment at target, the way we ship out orders is so inefficient compared to the likes of Amazon. Running around the store while it’s packed with customers, especially when they ambush you with questions while you’re on a timer, is not only stressful, it isn’t viable long term. It’s to the point where we get so many online orders we’re having to pull employees from other departments to pack orders, which results in every other area of the store being neglected. Not to mention that hitting the ship deadline every day is utterly exhausting.
From Target's corporate perspective, I understand the strategy behind using your existing stores as many fulfillment centers, but for the people working their day-to-day it has to be so stressful. It seems like it's basically getting twice as much work and a second job for what I'm assuming is the same pay.
They're correct. As a former executive at a Target store it's consistent added pressure to the store teams and leaders with no support. The goals and pick times consistently go higher however the payroll to accomplish it does not increase. So, other team members from different areas are pulled to accomplish the goal which leaves their work centers neglected. Even knowing this we're expected to hold them accountable for their areas even though they've been forced to spend their whole day in fulfillment. I hope they wise up and start pushing some of this 100M into stores to facilitate a better culture around it. Though I doubt it.
Yes. As a former employer, Target has been using humans to fulfill orders walmart and amazon and even grocery stores have long used automation to fulfill. It's not even like robots will take out jobs, fulfillment is one of the quickest burnout jobs in the store. Would have saved me from breaking my knees. Automation would save so much frustration every employee feels
I would’ve been one of those humans but they rejected my application.
Why isn’t anyone else talking about how they just showed us the customers full name and address 😂
Target is going to have challenges to handle volumes of scale and operational costs due to having to have staff walk and pick orders compared to Amazon. Amazon is purely fulfillment with even faster delivery times than target unless you intend to drive to pickup.
They act like this is revolutionary, but it's just omnichannel retail JCPenny, under Marvin Ellison, was trying to implement the same model, but JCPenney was too far gone by then. It makes sense to use the vast network of stores as mini-warehouses in order to reduce shipping time but the main issue can be staffing levels which Target likes to keep as barebones as possible which means you're taking staff away from the sales floor to fulfill online orders and grocery pickups. As someone who briefly worked for Target while in college nearly two decades ago they already expected you to do the work of five associates and three job categories back then. I can only imagine how horrible it is now as a GSTL.
Exactly.
And shipping from the store back to a sortation center, which can be hundreds of miles away while Amazon ships directly from their FC.
This better be an interim solution.
Target has been struggling for years with out of stock shelves. Yes, the pandemic played a role. But so does taking store inventory for online sales. They have to do a better job in the area.
Nowadays it's the complete opposite. The warehouses are literally being emptied out and now the Target stockers are forced to put 20 items on the shelf when only 5 will fit.
What bothers me the most about Target is that in my experience, the store places seemingly arbitrary rules around the items that I want to be delivered. I will be shopping online for items that I normally buy in-store and some of the items are two-hour delivery only, some are two day shipping only and some are in-store pick up only all in the same cart. The worst part is there doesn’t seem to be any consistent reason as to why all the items can’t all be shipped using the same method. Months later that same item that was “In-Store Pick Up Only” is now only available for 2 hour delivery or vice versa. The whole experience is very frustrating and confusing.
what bugs me is even if you subscribe for Target's Shipit subscription, same day delivery still comes with a tip demand. Walmart and Amazon don't ask you for a tip for the offering of same day delivery. It's an added cost on top of the subscription.
Probably depends on how many of an item are available near you and how many of the stores are setup as shipping locations. The change from pickup to shipping a month later could be due to the locations updating for nearby shipping. There's always pain points with change and even moreso with established brands with physical locations.
Target's strategy won't work. They make their employees run around the store fulfilling orders on a timer which stresses them out and causes near accidents with customers getting run over by these employees with shopping carts because the employees are afraid of their timer expiring. Also it leads to alot of ordered items not being found because the employees feel so rushed. There's not enough time to search when theres a huge amount of orders for shipping and online pickup all coming in at once. It's going to lead to massive burnout and turnover of their employees then what will Target do when they are severly short staffed??? Target customers wonder why theres no cashiers or customer service at Target? It's because they have their employees running around filling orders. You can't run a store like a warehouse. It's either one or the other.
Just hire online shopping team only that doesn’t check at all
@@mmakotal4388 They do have a fulfillment team but it is severly understaffed for the number of orders coming in. It's literally non-stop orders from open to close. Also they penalize the fulfillment employees if an item is not found for an online order which is ridiculous. It's not the employees fault the item is out of stock or got stolen.
@@billorange964 they get paid hourly , they are not in real trouble. That’s the department you sign up for just like how cashiering is non stop and pentalize you if u don’t check id or give correct change
Showing full name and address at 5:20 lol?
I noticed that to lol
This is miss up 😅😅😅😅
I was thinking the same thing
Dude they are gonna get sued
It's not real.
Cheese and Rice...why is this what people are noticing and commenting over and over?!
Google it - it doesn't exist.
We don’t need faster delivery. We need higher quality products and better designs that is affordable and desirable. Simple. 2 day delivery is fine.
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Exactly. What is the point of getting an item as fast as possible just to be disappointed by the (lack of) quality when it arrives?
They are trying hard to keep up and I'm sorry but a few associates pushing around carts and scanning shipments is nothing compared to the powerhouse of Amazon.
People are not factoring how much trash/fakes are on Amazon these days. It's like shopping in a minefield.
Walmart has a similar problem with third party sellers. I think there will always be a place for brands like Target where at least you know what your're getting.
I don’t like to buy from Amazon for this reason, you never know what you will get
Target is racing on a horse against Walmart and Amazon on F1 car. Assembling the order is labour intensive, you want to automate that part as much as you can. What happens if you try to ship an item that was stolen by a customer? Also, there could be a lack of people willing to use their car to deliver for them...
This process feels archaic and extremely inefficient. Unnecessary steps to complete an order and lack of automation. It's a temporary solution but will ultimately lead to Target's demise unless they pivot their strategy to align similarly with Amazon.
Does the average customer really care? Will they use this as a reason to switch to other sellers?
Target seems to be using the old Sears tagline…’our stores are our biggest asset’. Look where it got them. Those who don’t know history are doomed to repeat it.
Target is really competitive and doing a great job keeping up with the times unlike Sears
I love Target. They’re finding a balance in the automation market. It’s an evolving process. Amazon is a notoriously terrible company to work for, and is completely reactive when it comes to employee safety. They prioritize profit over all else. I prefer having a Target in my area than a Walmart, and will pay the difference in price for the quality shopping experience.
Should have blurred Katies address... unless that was a test package, I would not be happy.
The wisest thing that should be on everyone mind currently should be to invest in different streams of income that doesn't depend on government paycheck, especially with the current economic crisis around the world. This is still a time to invest in Stocks, Forex and Digital currencies.
Sure, investing is essential for maintaining your financial stability, but making any kind of legitimate investment without the correct advice of a professional can result in a significant loss as well.
Can we also do a video of Walmart's warehouse? Love to see the difference.
Not covered online customer dissatisfaction issues such as the big pick sticker placed on your item by the in store employee and orders not being fulfilled because an instore customer buys the item prior to the Target employee picking the item.
Kinda wild target gave the okay for this video. Now we all know target is 10 years behind. Lol
We move around the conveyors so much whenever our processes change that we cant set up sorters or scanners bc they'd inevitably need to move. The Target fulfillment center in Woodbury, MN has all of the automation the sortation center will eventually get.
Grainger has been doing that for decades. And their inventory control made them super efficient to reduce picking time.
I had a bad store pickup experience with Target last month. sure 2 hours sounds fast right? not if associates cant find your item with your "ready to pickup" email. 1st associate eventually said those items werent available, would be refund.. 2nd associate found 1 out of 3 items. it's like Target isnt ready.. when items arent available, instead of emailing me like walmart... they wanna you to find out from associates..
Walmart was doing this in smaller scale 10 years ago when they used to have "site to store".
they would have stores / hub stores send it out via fedex, intially they offered pickup at your local store(sometimes via there existing gm trucks or via mtr) but also would directly ship it your house for a small fee,
after covid, they quietly changed that proccess to "ogp/pickup" where they now use 3rd party last mile carriers.
to do the 70% of the same proccess faster under a different name.
its a bit buggy when it comes to fresh/food avaliblity, becuase with strictly "ogp" orders ie food it may not let you order if your preferred store dosnt stock it, unless you change your store.
as a note, shipping from target is not even possible without a minimum order of 35$. .
you cant even pay them extra shipping, they will not ship it, to me they lose alot of business this way from me, on top of there higher prices.
Was Katie Johnson happy you gave her address to the world? 5:04
Always the W's of W CEO and people in power.
I don’t get the sortation centers isn’t that just the same as Walmart and Amazon fulfillment centers except worse since the items aren’t stored on site?
This video shows why Target stock surged today. Also showing potentiality to buy&hold Target stocks.
A response to some of the comments:
- Target's current process is not set in stone. If you noticed any inefficiencies in this short 9 minute video, believe me, Target is aware and is working to fix them. The solutions already exist, they just have to purchase and implement them.
- Target employees saying that you wish they had more automation as this would make your job easier: Target will absolutely make better and better use of automation, your job will soon be eliminated all together, so don't worry so much.
- And they don't have to compete with Amazon, they just have to improve the customer experience, and this is what they are doing. This cute little fulfillment operation of theirs won't ever compete against Amazon, but it will raise their bottom line.
Are you their spokesman? Them being far behind their competitors is obviously a problem and a threat to their continued operation. I'm sure Kmart had solutions ready to go too before they shut down. Based on this video, even if they do everything theyre planning to do by 2026, theyll still be behind where walmart and amazon are today. The employees very well might have their jobs eliminated but not by automation, but by their passive ineffective business strategy
Will the overall inventory of each store be increased in order to accommodate online and store shoppers?
“They use their stores as fulfillment centers to reduce delivery time since the stores are closer to customers ” great and smart thing to do . “Then they ship the orders to sorting centers for the last mile delivery “ what?! that just defeats the whole point of a MFC. It actually seems worse than using the traditional way of fulfilling orders. I’m genuinely curious, am i missing something here?
I'm more concerned about the data breach on 4:55
Target is messed up
Remembering the good ole days 😅🎉
Service Merchandise was ahead of it's time.
Target has one of the largest buildings in the world near me. It's distribution fulfillment center is almost a mile long.
Lots of cheap labor and criminals to hire in Riverside California. Amazon and several other warehouses here , like nowhere else. But that could also be because of the trains and shipping docks
I love target! I know im not buying from a sketchy seller and it can come to my door or i can pick it up and get a coffee w/o having to get out of my car❤
I’m sure Katie Johnson wouldn’t be happy her address wasn’t redacted 😅
@5:21 I hope that’s not a real customer and address information.
5:06 WSJ please blur out the address on ACTUAL mail in your video. How’d y’all let this through?!
Meanwhile, workers are overworked, exhausted, and underpaid. I'd support a business that's willing to slow the speed of shipping at the health of their employees & their mental health.
I am an old dude who has worked in manufacturing, services, and my last 20 years in technology. What you are seeing in this series is the future and where the work and our economy will be. My humble suggestion to the new generation, stop believing ridiculous, bombastic politicians (left or right) who are telling you old jobs will be brought back. They are not. There is neither interest nor money flowing into those. Learn warehouse construction, logistics, distribution, electronics, mechatronics, robotics, software development, AI, and especially business intelligence and analytics. That is where most of the work will be in the future. That is particularly true in states where the population density is low and makes more financial sense to locate new jobs (you can work from anywhere).
So you’ll ship it away from the target store that’s 1 mile away to a distribution center further away to be juggled around and then sent to my house? That’s bad
Automation is a big reason why Amazon is leading and winning in the "shipping wars" at the moment 😅
I think it is a smart idea what target is doing.
Other big box retailers will follow their idea
This shows how Target has a blind spot. Ship products to a distribution center, ship to the store, stock it on the shelves, pick it from the shelves, pack it up and ship it to shipping center, manually resort and resort and hand off for shipment to you. That is a ten step manual process. It is limited in this model to these human robots. They are the smallest player and this will only siphon dollars.
Gotta root for the underdog :)
I’m about to go to work and do this rn. It’s a chill job. It’s works though
Price is my priority; differences in shipping isn’t terribly important.
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This feels like one should open a short position on TGT, not if but when
Thats great for low volume orders since it closely matckes with instore pickup but thats not goeng to scale or compete against fulfilment centers.
And these seem to perform a few additional steps compared to fullfilment centers.
Why do they make it as if the goods arrive at these stores magically. They all are delivered in large batches to these stores, which might be shelved from where the employees again take from to fill orders. Thats a very inefficient system if it is going to be anything more than a supplementary system.
Target is my go to for online shopping. If they don't have it then I try Amazon.
Walmart often sends my online orders from a local store. Yawn WSJ.
Lots of retailers (struggling ones like JcPenney) do this also. It’s baffling how they spent 5 min talking about how the store closer to your house makes more sense to fill an order, and then they said how those packages get routed away to a sorting center??? Target has been riding on their past for awhile now but the stores have a very Kmart flavor in many markets. Tired looking old stores with cheap remodels, no cashiers, higher prices than competitors.
Does Target still charge for shipping under $ 35, even with a Redcard? I shipped from Target years ago when all Redcard purchases included free shipping. Now I have Prime anyway, so I just go with that if I need a tube of toothpaste.
Yep
One way target can deliver quicker and faster is by closing stores at 11pm to the general public and then having more staff collect items in the store for tomorrow or overnight shipping.
The minute Amazon started requiring $35 for free shipping I switched to Target. 2 day delivery vs Amazon’s one week delivery.
I don’t think you are correct about the limit, I have Prime and I can order anything for free shipping 😊
@@adamsd6638 strange definition of free when you pay $139 a year for prime. Must be the new math Congress uses.
Correct, Prime includes free two days shipping, free returns, Amazon Video, and discounts. Shopping with free returns feels very comfortable and actually more comfortable than shopping in store. In other words, the $139 is for a better shopping experience.
You pay a small fee for MORE than just shipping. The other benefits (Amazon video exclusives, Amazon music, special discount coupons, 5% rewards, etc. etc.) are worth the small fee for sure!
@hfredydl Let's be real, 139$ for all Amazon brings to the table is a steal, as a former UPS manager i can tell you UPS does not give a duck about your packages. Amazon has incentives for drivers, lowering the liability with having something shipped to your door.
In the 5 minute marker it has the “Customer’s” personal information on there……that should be blurred out for privacy purposes
The Target location featured in this video is always super busy!
What does Target sell that you can't already get from Amazon?
I still don't understand the value of having the packages ready at the stores but then brought to a assortation center after they're already packed. Wouldn't it be just easier to have them shipped right from the store?
No, because the level of effort required from the in-store staff to pack and ship a consolidated truckload of items (which have not been put into their final delivery boxes yet) to the same nearby sortation center every day is much lower than packing and shipping individualized packages to customers, especially when you factor in the chaos of independent contractors using their personal vehicles to make deliveries.
The one thing HR has to making schedule is . really stupid.. only Team leader nows who's working is or who isn't working.. Target can not compete with Amazon at Walmart. target Lost on Online shopping 🛍️.. trust me I work with the target almost 8 years. Still same . Items cannot found. OPU needs help everyday.. people cannot handle the stuff . Give a time to clean up the store
Genuinely curious, did you go to school?
I don't like that stores will become closed to consumers. There's not always multiple Target locations in an area, so last minute purchases will be bought at competitors. Keeping the option for drive up or walk in pickups could alleviate that concern.
is this why almost every target i walk into the shelves are empty because they cant keep supply for both online and in person shopping?
Yes that is true. They are sacrificing stock on the shelves for in store customers for online orders. That is why they can't run a store like its warehouse. People don't shop warehouses so warehouses don't need to worry about in store customers like Target.
I would use this feature if they offered free shipping on any order. It’s usually free shipping on orders of $35+, and you just can’t compete with Amazon when you can get almost anything with same/next day delivery *and* free shipping
It’s free if you pay with their Red Card
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If each local store have to ship to a sortation warehouse, that defeats the advantage of local stores being near their customers. Why not just store the products in the sortation warehouse?
Hey at 4 mins 55 seconds you guys are displaying a person personal information your asking for a lawsuit
Do you guys think we to much 1:10 consume and buying
So i understood how they stood out until 2:34. So essentially they pick the item from a local store then send it to a warehouse and then it goes out to the buyer. That part made it seem like the first part of the video is for nothing. They are still bringing it to a warehouse.
The automation level of Target is way behind Amazon. I guess the volume per store is low and deploying automation is not their best shot at the moment.
The thing is this new for Target so there seeing how this impacts sales and profits before they spend millions and millions in dollars on tech
Love TARGET
If they could turn all their stores into fulfillment centers, that could make it really hard for Amazon to compete. The only problem is Amazon robots sort much faster.
Didn’t know target was still in business. Thought they Bud Lighted themselves.
Smart
I love Macy’s and hope they can do the same
Dude, I just ordered a Roomba from Target online and it showed up in two days! I mean, it was so fast. Also the same price as Amazon.
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@@wsjTarget is paying WSJ to fluff
The narrator has such a soothing voice.
I've never seen people move so slowly!
I have not visited the Target stores in the last 5 years, because I have no need to visit the Target stores at all!
Seems like reliance india is doing the same with several small supermarkets
You should have took over the store right next to your orange store in Connecticut that would have been smart
This to me is a better process than Amazon because the quality control has several checkpoints. Not only that, I guarantee you the workers are a lot happier at Target than Amazon. Faster is not always the best solution. Target is not going after speed as much as they are efficiency. That's the best route to take. As a customer I would rather wait a day longer with no issues than having a promise of two day delivery with issues. Most of the time Amazon can't even hold to their prime two-day shipping promise.
Why do you need a human to look at labels and push boxes one way or another?
Target: Factory -> warehouse -> store -> you. Amazon: Factory -> warehouse -> you. My money is still on Amazon.
Ha ha . even in Canada Walmart launch 3rd party marketplace order system. Target is way behind Walmart in term of Ecommerce.
biggest asset? or more expenses?
guess I better start back to shopping Target
Yall really just put Katie Johnson’s address out there 😂
I feel the storyline is almost identical to the Amazon vid released earlier. Difference is just the data set
Their problems with logistics is what caused Target to close all of their stores in Canada, which were only open for two years.
Target beats the other two in my house!! Any day!!
God after watching this I’m so glad I work for Amazon
Wow, you even said Edina correctly at the beginning. Most non Minnesotan's say Eh-deena.
I was saying Walmart should do this exact thing 10 years ago.