Last year, COVID-19 battered the economy, yet Walmart, Home Depot, and Target (to name a few) all found ways to have a fruitful year due to the integration of their digital platforms with their brick-and-mortar stores. Target’s sales growth of $15 billion was more than the past 11 years combined. The $9 billion market share gain, all thanks to their physical stores, best illustrates the strengths of their strategy. 

Back in 2017, when Jeff Bezos spent $13.8 Billion to purchase Whole Foods, Brian Cornell, Target’s CEO, had a huge wake-up call. Instead of following the trend of other major retailers who were investing into online, Cornell began reinvesting in his brick-and-mortar locations. But he was not ignoring online commerce; in fact, he had an even greater vision. He was finding a way to improve their online platform and connect with their physical locations, making the shopping experience much easier and more enjoyable for consumers. Thanks to the development of this digital platform and their acquisition of Shipt, Target was in the perfect position to take on the pandemic - and thrive. 

Target’s growth over 2020 was huge. They grew in almost every category - digital sales, in-store sales, market gain, basket growth, traffic increase, and more. Services like drive-up (up 700%), in-store pickup, and same-day delivery through Shipt became widely available and extremely popular throughout 2020. This omni-digital experience is proving to have more and more benefits, AND is being widely sought out by consumers. 

Target has hardly been alone in using a digitized brick-and-mortar-based model. Home Depot has done some impressive things with its own in-store pick-up service. They reported that more than 60% of 2020 Q2 and Q3 total sales were online orders fulfilled at brick-and-mortar locations. This “click-and-collect” method has proven very successful for many companies, including Target, as more than 95% of their Q4 sales were fulfilled by stores.

Target is a great example of how the real future of retail is this omni-digital shopping experience. Retailers that adopt this strategy will continue to grow, and easily navigate the ongoing challenges through the pandemic and in the years to come. The future of retail is the fusion of E-commerce and brick-and-mortar. 

There is also a new breed of retailer: the direct-to-consumer (DTC) brand owners, and I plan to highlight a few of those soon… 

Take a deeper dive into Target's recent growth!