Target Continues Its World-Class Execution Led By Same-Day Services Growth

#Target continues its WORLD CLASS EXECUTION In Q3 Earnings Led By SAME DAY SERVICES GROWTH

1 - Leadership and Priorities Set the Tone

- Everything starts here. There is one set of small enterprise-wide priorities on the things that matter. This enables better execution and collaboration.

- In contrast to many companies where the "list of priorities" number in the dozens.

- You cannot collaborate across departments without enterprise-wide priorities, period.

2 - Significant Growth in Same Day Services

- Same day up 60% on top of 200% year ago.

- Driveup/curbside leads increased 80%, on top of 500%+ year ago.

- Supply chain mix materially shifting: ship to home declined slightly. "Meaningfully more profitable than ship to home."

- In store pickup + Shipt up 30%

Target has written the playbook on the modern retail supply chain over the past 5 years. Now it's up to Amazon and Walmart to follow it.

This is on top of ---- - Stores comp sales 9.7% on top of 9.9% last year. - Digital comp 29% on top of 55% a year ago.

3 - More Profitable Than Its Peers, and Pulling Away

- Target moved to 8% operating profit margin from 7% in 2020. -- Contrast with Amazon at flat to -1% Retail Margin -- Contrast with Walmart ~3% retail margin

- 95% of all shipments handled from stores (digital+sameday)

- Due significantly to lack of markdowns (smart merchandising, inventory), best-in-class hiring practices (more hours for current workers, hiring successes), and leverage due to same day services (significantly more profitable than traditional ecom)

4 - Best in Class Hiring Practices

- Store worker hiring targets on track

- Existing workers being bonused + working more hours as planned

- Store turnover - particularly with new workers - down.

- Adding 30k permanent supply chain roles into next year.

WRAPUP:

You wonder why Amazon is getting more into physical #retail? It's not much of a mystery. Operating Profit Margin.

IMO Target is not only kicking sand in the face of investors looking to split digital + physical, it is digging a grave for them and kicking them into it.

#ecommerce

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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