Target will enlist 450 stores for faster online order delivery

Aug 20, 2015, 11:35am CDT

Nick HalterStaff reporterMinneapolis / St. Paul Business Journal

Target Corp. is turning more stores into shipping hubs to deliver products to online shoppers faster.

This fall, Minneapolis-based Target (NYSE: TGT) plans to offer online customers a commitment that they will receive orders in two or three days, CEO Brian Cornell said during Wednesday's earnings call. Target.com orders now typically arrive in five or seven days.

Target began using 137 stores for shipping in June of 2014, with Minneapolis serving as one of the test cities. By the end of the year, Target will use 450 of its 1,800 stores for shipping.

"Ship-from-store capabilities allows us to balance inventory across the network, leverage the capital and labor already in our stores and reach guest more quickly," Cornell said in the call, according to a Seeking Alpha Seeking Alpha transcript.

The supply chain was a hot topic on Wednesday as Cornell told investors that the company's complex model has led to "unacceptable" stocking at stores.

"Some retail fundamentals have started to suffer. ... Our guests deserve better," he said.

Cornell promoted John Mulligan from chief financial officer to chief operating officer to handle supply chain and fix those problems.

"In this new role I've asked John to focus first and foremost on improving the capabilities of our supply chain, working across organizational boundaries to understand and address root causes that are hampering day to day execution," Cornell said.