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In 2023, less than a year into her tenure as Target’s supply chain head, Gretchen McCarthy came to a realization—the mass merchant’s logistics operation would vastly benefit from the data customers were accessing when search for products within the Target mobile app. Two years later, better use of this data combined with more than $100 million invested into the retailer’s sortation centers has helped Target’s same- and next-day delivery expansions take off.
Target had been measuring out-of-stocks as the primary inventory reliability metric for years, according to McCarthy, but consumer research by the retailer learned that shoppers using the app had the best grasp of what was available at their local store, as they had access to more accurate real-time product location data.
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“That kind of understanding really caused us to step back and think, the front door to a guest isn’t the Target store. The front door to a guest is our app,” McCarthy, officially the company’s executive vice president and chief supply chain and logistics officer, said during a one-on-one keynote at the Manifest supply chain and logistics conference.
“You need to understand, is my item eligible? Is my item available? Is it eligible for all fulfillment types? Are we tracking every single item in our catalogue?” McCarthy said.
She noted that by collecting more of that granular data, Target can more confidently direct its wider product assortment to different fulfillment options depending on their location, including same-day delivery, next-day delivery, in-store pickup or the Drive Up curbside pickup option.
“We have talked about the power of having 75 percent of Americans live within 10 miles of a Target store, but what we hadn’t done was really connect the end-to-end ecosystem and value stream, starting from our stores all the way through our Target last-mile delivery. We weren’t able to promise a delivery that was as fast as it is, given where our stores are located, but the teams took that on,” said McCarthy. “They solved that problem horizontally, and now being able to connect our stores to our sortation centers to target last-mile delivery.”
In its most recent quarter, the retailer saw nearly 20 percent growth in same-day delivery and double-digit growth in the Drive Up curbside pickup option. In November, chief operating officer Michael Fiddelke said average shipping times were nearly one day faster than in the year prior, with the company’s now 11 sortation centers have saved the company “tens of millions of dollars” in last-mile delivery costs in 2024.