Target expands next-day parcel delivery to 35 top U.S. markets
Retailer says the move will reach 54% of the U.S. population as it leans on stores, fulfillment centers and Shipt to speed deliveries and close the gap with Amazon
Target will expand next-day parcel delivery to 35 of the nation’s top 60 metropolitan markets by the end of next month, the company said, marking 22 new cities added this year and increasing its reach to about 54% of the U.S. population from roughly 20%.
The expansion includes major metro areas such as San Diego, Orlando and Tampa, Florida, and Target said it plans to add about 20 more cities for next-day delivery by next year. The company also continues to offer same-day options that cover more than 80% of the U.S. population through store pickup, drive-up and third-party delivery services.
Gretchen McCarthy, Target’s chief supply chain and logistics officer, said the company is shifting from a national fulfillment model to a market-based approach that uses stores and fulfillment centers more precisely to increase speed without eroding profitability. “I think about us moving from this national fulfillment model to this market-based approach,” McCarthy told The Associated Press.
Target operates more than 1,900 stores and has 11 sortation centers that batch orders packed from stores for delivery through its Shipt subscription service or third-party carriers. The retailer said it is expanding partnerships with national carriers while leaning on Shipt, which it acquired in 2017, to have drivers pick up and deliver directly from stores to customers’ homes.
The next-day push comes as Target faces a broader sales slowdown and operational challenges that executives say have affected the in-store shopping experience. The company acknowledged that transforming physical stores into shipping hubs starting in 2017, and then the surge in online orders during the pandemic, pulled store employees into online fulfillment work and strained the in-person experience.
Target has been testing a new shipping strategy in the Chicago market — where it operates nearly 80 stores, two fulfillment centers and two sortation centers — by concentrating local shipping demand into a handful of stores. In that test, the company routed a higher share of local orders through six stores, increased volume processed by fulfillment stores and shifted shipping out of 18 other stores. McCarthy said the test raised same-day delivery capacity while lowering the delivery cost per item.
Those elements of the Chicago strategy are being launched in 30 to 40 additional markets, the company said, with some of those markets slated to receive next-day delivery capability. Target’s move to speed deliveries and change fulfillment patterns is intended to narrow the gap with larger e-commerce competitors.
Amazon, by comparison, expanded the number of same-day delivery sites by more than 60% in 2024 for Prime members and currently serves more than 140 metropolitan areas. Target said its combined approach of store-enabled pickup, curbside services, sortation centers, fulfillment centers and carrier partnerships is designed to balance speed, availability and cost as it scales next-day and same-day services.
The company also announced an executive transition in August: Michael Fiddelke, a 20-year Target veteran and current chief operating officer, will succeed CEO Brian Cornell on Feb. 1. Target has not tied that leadership change directly to the delivery expansion but has emphasized operations and supply-chain adjustments as central to improving sales and customer experience.