Page 25 - ARUBA TODAY

BUSINESS Wednesday 21 november 2018
A25

Target's investments in the future hits margins

By ANNE D'INNOCENZIO backroom, the faster we
Associated Press can make that promise,"
MINNEAPOLIS (AP) — Tar- said John Mulligan, chief
get's ramped up invest- operating officer, during a
ments online and in stores phone interview with The
are bringing in shoppers, Associated Press. He says
but they're bruising the bot- the ultimate goal: a 24 hour
tom line right now. turnaround between when
Company shares tumbled an item is sold and then re-
10 percent before the placed on the shelf.
opening bell Tuesday after Target says all the new en-
Target missed profit expec- hancements in its online
tations for the third quarter, operations will enable the
the last look at the retailer's company to fulfill twice as
performance as it heads many orders for the holiday
into the holiday shopping shopping season as it did
season. last year.
At the same time, revenue Mulligan said that it de-
at stores opened at least ployed engineers and
a year rose 5.3 percent, its analytics to analyze each
sixth consecutive quarter in step of the process figuring
that direction. And online out where the bottlenecks
sales soared 49 percent. In were and how to eliminate
the previous quarter, Target In a photo taken Friday, Nov. 16, 2018, Target employee Lindsay Walker scans an item as she them.
racked up the strongest collects merchandise from shelves to prep them for an online order at a Target store in Edison, During a tour of the back-
same-store sales growth in N.J. room at Target's Edison,
13 years. Associated Press N.J. store, workers assume
The battle for customers ing its stores into shipping on their phones that help ships an online order from a specific tasks in assembly
has become rooted in con- hubs to cut shipping costs them navigate the store to store, it ships two days fast- line operations in a space
venience and to that end, and speed deliveries. It's find the online orders more er on average compared that's the size of about 12
Target leapt in front of rival expanded a variety of ser- quickly or tell them exact- to shipping from a fulfill- parking lots.
Walmart with free, two-day vices that allow people to ly how much tape to put ment center. Workers now use new carts
delivery for any delivery. pick up goods curbside or across that box of Tide so In fact, 90 percent of Tar- that have 19 compart-
Amazon followed by drop- get next-day delivery for it doesn't open during ship- get's two-day online deliv- ments that can keep ev-
ping its $25 minimum for some purchases. ping. eries are being handled at eryone's order separate.
free delivery. Behind the scenes, it's been Roughly about 130 stores stores. Revamped back- Previously, workers put ev-
Early last year, Target be- remaking the backroom have undergone a major rooms are doing three eryone's order in two bas-
gan an aggressive three- operations of 1,400 of the backroom overhauls, com- times more volume than kets in cart.
year plan to invest $7 billion 1,800 stores that ship online plete with conveyor belts the rest of the chain. All this is designed to make
in its stores and online op- orders to customers. Tar- and LED lighting similar to That's helped Target be- the job "simple and repeat-
erations. get says that overhaul was the store's selling floor. The come 25 percent more ef- able as possible," Mulligan
The company has been been key in its ability to of- changes shave seconds ficient in shipping online said.
remodeling its stores and fer two-day free shipping off each task, adding up orders than just last year, Still, the latest results show
building brands from this holiday. to minutes saved that will according to the compa- that Target has more work
scratch like trendy elec- Target exclusively told The bring shipping costs down. ny. to do to keep costs down.
tronics under the Heyday AP that it's redesigned the The new measures under- "We're trying to get speed The company reported in-
brand and men's clothing pack stations, while work- score how Target is dou- for the guests and the come of $622 million, or
brand called Goodfellow. ers' tasks are now divided bling down on becoming faster we can get in the $1.17 per share. q
But with increasing pres- into clear roles: pickers, more efficient.
sure from online behemoth those who prep orders, Two-thirds of Target's on-
Amazon and shoppers' packers and sorters. line volume is now going
demanding more con- Target workers have also through the stores with
venience, a large part received new tools like new more than half of the orders
of those investments are carts that have compart- being shipped to homes.
going toward transform- ments to make it easier to The remainder is from order
organize the orders. They're pickup or curbside pickup
also armed with new apps services. When Target