Target Corp. (TGT) - Get Target Corporation Report will open 35 new stores in 2018, the company announced Thursday, Oct. 19, ahead of its store opening event in New York City. The supercenter chain will largely focus on small-format stores, planning to operate more than 130 small-format locations by the end of 2019.
This week, Target will open 11 small-format stores in New York, Chicago, Los Angeles, Philadelphia, and Minneapolis, as well as a traditional store in Honolulu. It will have opened a total of 32 new stores in 2017.
At the opening of its Herald Square location in New York City, Target CEO Brian Cornell, told reporters that "reimagining" Target stores will be a major component of its $7 billion investment plan, first announced in February. Store remodels will reach 1,000 by the end of 2020.
The remodeling has resulted in a 2% to 4% lift in sales.
Target's plans are now coming to fruition, Cornell noted. "All the things we're planning and testing, they're coming to life across the country," he said.
Optimizing the supply chain is another facet of the investment plan, Cornell said. As part of that process, Target is reducing its inventory, improving its accuracy, and investing in staff training for better customer service.
The Minneapolis-based retailer is also rolling out same-day delivery services. By Oct. 20, four Targets in New York City will offer same-day delivery. From its pilot program in the TriBeCa store, Target found that the average customer shopping basket is six times bigger. It will expand its next-day day service called Target Restock, which is currently available in 11 markets-including New York and Los Angeles- but will expand in 2018.
Target's digital innovations include adding new features to its website, such as a 360-degree images to showcase furniture products. Target is also expanding its partnership with Alphabet Inc.'s (GOOGL) - Get Alphabet Inc. Class A Report Google, to add voice-activated shopping and two-day delivery.
The moves come as Target competitors like Walmart Stores Inc. (WMT) - Get Walmart Inc. Report also focus on delivery. About 99% of Americans live within 10 miles of a Walmart, which can deliver to 87% of Americans with next-day ground shipping and 99% with two-day shipping. Walmart also rolled out mobile returns earlier this month. Since completing its $3.3 billion acquisition of Jet.com last year, it's been on an e-commerce spending spree, buying niche online retailers like Bonobos, Moosejaw and Modcloth.
Amazon.com Inc. (AMZN) - Get Amazon.com, Inc. Report closed in August on its $13.7 billion acquisition of Whole Foods Market and immediately lowered prices at the organic grocer, prompting Target to also slash prices and boost wages.
Rather than compete with Amazon, Kohl's Corp. (KSS) - Get Kohl's Corporation Report partnered with them: beginning Wednesday, Amazon shoppers can now return their items in 82 stores in Los Angeles and Chicago. Sears Holdings Corp. (SHLD) inked a similar deal, selling its appliances on Amazon and adding Amazon's Alexa service to its appliances.
Cornell also announced that eight out of 12 of its new private-label brands will be available this holiday season. The new brands include apparel and home products. Cat & Jack, Target's kids' clothing line, is now worth $2.1 billion, he said.
This Herald Square opening, Cornell said, "is a symbol of the future of our company. Everything we've been talking about as a company is coming to life right now in New York City."
Shares of Target were up 0.2% to $60.16 on Thursday morning.
--Laura Berman contributed to this report
Originally published at 10:24 a.m. ET and has been updated
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