Target and Target+ Growth in 2020

George Hatch

March 4, 2021

2020 had plenty of downsides, but it was an incredible year for ecommerce. According to Digital Commerce 360, consumers spent a massive $861.12 billion online with U.S. merchants—that’s a 44% growth year-over-year! It’s the highest annual U.S. ecommerce growth in at least two decades, Digital Commerce reports.

Ecommerce growth was unsurprisingly dominated by Amazon and Walmart (the latter overtook eBay to snag the number two marketplace spot last year), but one marketplace that got noticeably ahead in the pack is newcomer Target.

Though it’s been slower to unroll it’s marketplace offerings, Target is making waves in the omnichannel sphere, and brands and retail competitors may want to take note, because the implications for its Target Plus platform are exciting.

Target 2020 growth

Target’s digital sales numbers for 2020 aren’t just good—they’re historic. The evidence is in the stats.

Target’s ecommerce sales jumped 163% to $10.37 billion in the first three quarters of 2020. To give you a sense of scale, that number is up from $3.94 billion during the same period in 2019.

Q2 was especially profitable for Target. Ecommerce sales grew 195% year-over-year, and Target picked up over 10 million new digital customers. John Mulligan, Target’s Chief Operating Officer, said new shoppers are coming back to buy more and at a faster rate than Target’s existing shoppers.

“It appears they are much more engaged with us,” he said.

Target announced in August that their Q2 comparable-store revenue, including online, grew 24.3%—the highest amount the company has ever reported—with digital sales accounting for 13.4% of Target’s comparable sales growth and physical store comp sales increasing 10.9 percentage points. Those numbers have outpaced Walmart’s, as Target is starting from a much smaller base.

Top 10 US Retailers by Ecommerce Sales in 2020

An October report from eMarketer shows that Target made $13.82 billion in sales in 2020, a 104% year-over-year change from 2019, and 1.7% of those total sales came through ecommerce. That was before the holiday season even got started.

Cyber Week 2020 was Target’s biggest ever, the company reports, with record-high digital orders, site traffic, and orders fulfilled via their curbside pickup service, Drive Up. In December alone, Target reports that guests purchased 150 million items using Drive Up and their Order Pickup services. While the global pandemic may have boosted demand for the Drive Up program, only time will tell if the convenience affects consumer behavior going forward.

Target’s sales were enough to push it to seventh place on the list of Top Marketplaces in the United States, ranking it above Costco, Wayfair, and Macey’s and just behind Home Depot. Target didn’t rank within the top ten in 2019, showing just how impressive their 2020 growth has been.

Top 10 Companies by Retail Ecommerce Sales Share in 2020

What’s driving Target’s growth?

Target has been investing heavily in their omnichannel since launching Target Plus. They implemented same-day shipping and curbside options—their Drive Up, Order Pickup, and Shipt services—before the Covid-19 pandemic began, and those same-day services are driving much of their digital growth.

Similar to Walmart Marketplace’s returns system, Target customers can purchase goods online and have them delivered quickly via Target’s network of stores, which act like mini distribution centers. If customers decide to place a return, they can also return the product to a Target location sans the boxing and shipping. These services have made the shopping experience easy for customers, and they’ve paid Target back in full.

Target reported in January 2021 that their same-day services grew a combined 193% during the holiday season, with millions of guests trying these services for the first time. The value of web orders fulfilled through Target same-day shipping services also grew 273% during its second quarter, accounting for approximately 6 percentage points of its total comparable sales growth. Mulligan said the value of the orders shipped from stores has grown more than $1.6 billion

Another thing we mentioned previously that’s driving a surprising amount of growth for Target is Drive Up. According to the transcript of a Target investor call held in November, nearly $700 million of Target’s growth came from their Drive Up service alone, which increased 500% year-over-year from 2019. That’s faster than any of their other same-day services (sales fulfilled through Target’s delivery service Shipt grew 300%). That growth, wildly, didn’t slow down in-store pick up—in-store pickup also increased more than 50%.

“We’ve seen continued strong sales trends in the new year, and as we turn to our 2021 plans, our team is focused on continuing to build on the guest engagement and significant market share we gained throughout 2020,” Brian Cornell, Target CEO, said.

Long story short, Target’s omnichannel strategy has played a critical role in boosting the brand’s growth by meeting consumers where they are and providing continued convenience.

What’s new with Target Plus?

Target is a massive 2020 success story, but updates have been fairly quiet on the Target Plus front.

Last April, we reported that Target planned on testing curated shipments of fresh food and adult beverages through their pickup and drive up services, similar to what Walmart and Amazon are already doing. In February 2021, Shipt announced a partnership with GNC to offer same-day delivery service for GNC health and wellness products, expanding the company’s grocery delivery options further.

"We're in the midst of an exciting evolution to a multi-vertical, multi-retailer delivery service and are thrilled to have GNC as part of the Shipt family," said Rina Hurst, Chief Business Officer at Shipt, in a February press release.

Much of Target’s focus has been on their same-day shipping services.

Target Plus recap

Target’s invite-only marketplace was launched back in February of 2019, and the platform has been slowly growing its number of third-party merchants and products. Starting with 30 sellers in February 2019, Target+ has grown to 272 sellers, according to Marketplace Pulse.

Target is differentiating itself from Amazon and Walmart with a more exclusive selling model on Target Plus. Unlike Amazon, not just anybody can sell on Target Plus, and not every product can be sold there, either—quality goods and vendors are hand-curated by the brand to ensure an excellent customer experience.

Target has been onboarding a limited number of strategic partners per category, according to Feedonomics, and their requirements are pretty stringent: sellers must have a business and bank presence in the U.S., they have to price their products on Target Plus at parity with their other sales channels, and orders must be shipped out within 24 hours.

One interesting feature of Target Plus is that it does not allow multiple merchants to list the same UPC. While that cuts down multiple distributors on a product, it also means that brands that are on the site early can secure market share.

Kevin Lamb, Marketplace Manager at Pattern, said he expects Target’s 1P growth will “vastly outpace” the growth of 3P offerings on their site.

“This is partly because their 1P offering is such a good customer experience, with curbside pickup, same day delivery and BOPUS (buy online pick up in store). It's also partly due to their current strategy with 3P sellers,” Lamb said. “They want fewer sellers and fewer brands, focusing on quality over quantity, so that their marketplace doesn't become cluttered like Amazon, eBay, or to a lesser extent, Walmart.com.”

Pattern is about to launch our first few brands on Target Plus, and we can’t wait to share our findings. It’s an exciting next step for our brand partners, and with Target expanding its digital services and presence, who knows what the future of the platform may hold?

To learn more about Target Plus and how Pattern can help you with your omnichannel ecommerce strategy, contact our experts today.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.