Through some of the biggest consumer demand shifts in living memory, few retailers performed as well as Target (NYSE:TGT) did in 2020. The company leaned on its consumer staples offerings through the early days of the pandemic before quickly recognizing -- and capitalizing on -- soaring demand for home furnishings and home maintenance products as the year progressed.

The retailer notched impressive profit margin wins, with operating income soaring 35% through late October thanks in part to the popularity of premium fulfillment options like same-day delivery.

That performance has investors feeling optimistic about the business in 2021 and beyond. So let's look at three big trends to expect from Target this year.

A young woman shops while wearing a mask.

Image source: Getty Images.

1. Market share wins

Target isn't unique in having notched unusually strong sales results during the pandemic. Walmart (NYSE:WMT), Costco (NASDAQ:COST), and select other national retail chains announced record growth rates after COVID-19 containment efforts initially disrupted (but eventually increased) consumer demand for stores that were deemed essential and were allowed to remain open.

Target won more than its fair share of that pandemic-related business. Comparable-store sales jumped 21% in the fiscal third quarter, for example, while Walmart logged a 9% boost for the same time period.

Unlike its bigger rival, Target saw rising customer traffic carry on through late October. Management credited the chain's unique mix of premium but affordable merchandise that allowed it to win business in competitive areas like home furnishings. "The result," CEO Brian Cornell told investors in mid-November, "is unprecedented market share gains and historically strong sales growth." Investors should look for that spike in customer count to deliver further growth ahead in 2021.

2. Rising profit margin

Boosting sales is even more impressive when it goes along with a rising profit margin. Here's where Target took advantage of powerful assets like its consumer discretionary offerings in 2020. Shoppers flocked toward premium products like home furnishings and consumer electronics, and they often paid more for ultra-fast delivery.

TGT Operating Margin (TTM) Chart

TGT Operating Margin (TTM) data by YCharts.

These moves set Target apart from peers like Costco, which aims to keep its profitability low in the interest of prioritizing its pricing advantage. Target is focused on delivering value, too, but still aims to boost margins over time. Operating income rose to over 7% of sales in the nine months that ended in late October, from 6% a year earlier.

3. Higher cash returns

Target is entering 2021 with tons of cash thanks to its operating wins, plus management's choice last year to pause stock buyback spending. Those repurchases will resume this year, and investors can also count on a rising dividend payment boosting their returns. The chain announced a 3% increase to that payout in June 2020 but could easily issue a more significant hike in 2021 -- assuming economic growth trends don't collapse in the fiscal first quarter.

Target's cautious approach to cash returns might disappoint some investors, but it's a key reason why the chain is one of just a few retailers to qualify as a Dividend Aristocrat, with a streak of at least 25 years of consecutive annual raises. Target will nearly double that threshold by announcing its 49th straight increase in 2021.

That's exactly the type of long-term success that investors should celebrate. But it's just one of many good reasons to consider owning Target shares right now.