Target plans to create a network of 15 Target sortation centers across the U.S. by 2026. The initiative will be made possible through a $100 million investment in the service.
The expansion plays into the company’s stores-as-hubs strategy, which leverages the retailer’s locations to fulfill orders directly to consumers. The sortation centers seek to drive efficiency by retrieving packages from between 30 and 40 stores, batching them, and routing them for delivery by either a third-party carrier or Shipt, a delivery service owned by Target. They will also shift the responsibility of sorting and packing delivery items from the stores, allowing workers to focus on other tasks.
Target currently has nine sortation centers throughout Minnesota, Texas, Colorado, Illinois, Georgia, and Pennsylvania, and has so far experienced an over 150 percent increase in the number of orders delivered in these markets because of the centers, according to the company.
In addition to the planned centers, the company also indicates that it is testing larger-capacity delivery vehicles that can hold up to eight times more packages per route. The new vehicles are expected to roll out to all markets over the next few years.
Target currently operates 1,948 stores in the U.S.
Related: Aldi, DoorDash Partner on Grocery Delivery; Colavita Inks Unique Ecommerce Pact with Boxed