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 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)