Target (TGT -0.21%) has announced plans to ensure a strong performance during the important holiday season, hiring about 130,000 seasonal staff (on par with 2019). The company is adding resources to provide a positive in-store and digital experience for shoppers, including additional training for staff who will focus on maintaining cleanliness and safety. Target will also be staffing up to ensure smooth execution for its expanding same-day fulfillment services.
Here's what you need to know about the eighth-largest U.S. retailer and its plans for the 2020 holiday season.
Image source: Target.
Additional resources to ensure customers feel safe and comfortable
Some consumers are naturally concerned about COVID-19 safety when shopping in-store. "Consumers are actively looking for use of masks and physical barriers when deciding where to shop in-store," according to an Aug. 28 survey of U.S. consumer sentiment from McKinsey.
Target is adding dedicated staff to ensure safety for its guests with team members working on disinfecting carts and handing out masks to shoppers. The employees working in stores and in distribution have received over 400,000 hours of safety training in 2020 and should receive "hundreds of thousands" more through the rest of the year. Target is also giving staff a flexible leave policy for illnesses related to COVID-19 with quarantine pay for 14 days.
Chief Human Resources Officer Melissa Kremer described Target's holiday strategy: "Knowing that the holiday season will be unlike any other, we're building in even more flexibility to make sure Target remains a safe and convenient place to work and shop, while investing in our team's industry-leading pay and benefits."
Same-day fulfillment and inventory planning
Customers at Target are increasingly taking advantage of its same-day fulfillment services (drive up and order pickup) with 10 million new shoppers flocking to Target.com in the first half of fiscal 2020. Because of this demand, Target is doubling the staff dedicated to these same-day services. During the 2019 holiday period, sales going through same-day fulfillment increased by over 50% year over year and accounted for about 75% of digital sales growth.
Target is also reinforcing its warehouses with both part-time and full-time seasonal team members to ensure its stores have adequate inventory during the busy season. The company will be sending more inventory from its distribution centers to stores to keep them well-stocked with popular items.
One-stop shopping appeals to consumers and could boost average basket size
The retail company's success in creating a convenient one-stop shopping destination should boost revenue during the holiday season too. Target has robust home and fashion offerings, and collaborations with popular influencers like TV personality Joanna Gaines are drawing in customers. A shopper can pick up a throw pillow from Gaines's Magnolia Home line and buy groceries in the same trip.
The positive impact of Target's vast array of offerings is evident in its average basket size growth of 18.8% in the fiscal second quarter as traffic increased 4.6%. During the period, Target saw trip consolidation both online and in-store. As shoppers make fewer trips to reduce their exposure to COVID-19, they are likely to favor stores that offer a wider variety of goods, which makes shopping at holiday time easier and more convenient.
With a proactive approach to store comfort and safety, as well as broad investments in fulfillment to meet an anticipated digital shopping surge, Target is set up to succeed during the upcoming holiday shopping season.
