Target's battle plan for the holidays: Free two-day shipping, more staff and toys

  • Target for the first time ever will offer free, two-day shipping with no minimum purchase required, starting Nov. 1 and running through Dec. 22.
  • The retailer has been investing heavily in its supply chain leading up to the all-important holiday season, in a bid to win shoppers over rivals like Walmart and Amazon.
  • CEO Brian Cornell also says he's "confident" the company will meet its hiring goals, despite such a tight U.S. labor market.

Target for the first time ever will offer free, two-day shipping with no minimum purchase required this holiday season, in a bid to win shoppers over rivals like Walmart and Amazon.

The retailer said Tuesday that starting Nov. 1 and running through Dec. 22, "hundreds of thousands of items" will be eligible for free, two-day shipping on Target.com. In March, it began offering the perk to its credit card holders or for those orders over $35.

Also this holiday season, Target said its "Drive Up" service — where shoppers can place their orders online and have them brought directly to their cars — will be at nearly 1,000 stores, ahead of a planned rollout schedule. And its same-day delivery option via Shipt will be available nationwide.

Target has been aggressively investing in its supply chain to give customers more ways to either shop in stores or online. With the latest progress, Target said it's never been more confident heading into the all-important holiday season, where for some companies more than 30 percent of annual sales can take place. And this year, there's plenty of market share up for grabs given the demise of Toys R Us, and Sears' recent bankruptcy filing and plans to shutter stores.

"I have never felt better about our position and our readiness to deliver against the holiday season," CEO Brian Cornell said Tuesday during a holiday preview event with members of the media. "As those [Toys R Us and Sears] stores close, its real market share that's up for grabs."

The free shipping announcement by Target follows rival Walmart saying it will expand two-day shipping and in-store returns to many items sold by third parties on its website next month. Walmart currently offers free, two-day shipping on millions of items on its website for orders of $35 or more. And Amazon offers paying Prime members free, one-day shipping on more than 1 million items on its website, again for orders of $35 or more.

In making a big push online, Target has been leaning into its fleet of roughly 1,800 stores. It's on track to have remodeled 1,000 of its stores by the end of 2020 — which are being outfitted with new pick-up kiosks inside and drive-up spaces in parking lots.

Confident it can meet holiday hiring goals

Last holiday season, Target said its stores fulfilled 70 percent of all digital orders. This year, that percentage is expected to be even higher. That's a big reason why the company is hiring 120,000 temporary workers, or 20 percent more people than it did a year ago. About 7,500 of those workers are expected to help pack boxes in warehouses, according to Target, and the company will double the number of hires fulfilling online orders in stores and distribution centers this year.

Cornell said Tuesday that he's "confident" the company will meet its hiring goals, despite such a tight labor market in the U.S. that's making help harder to come by. He said Target had already received 100,000 job applications as of a recent holiday hiring event, and applications for jobs specifically within distributions centers are up 40 percent year over year.

Target meanwhile expects that shoppers will flock to its stores this holiday season for the in-house brands they can't find elsewhere. It's rolled out more than a dozen of its own labels — for everything like clothing, furniture and electronics accessories — since the start of 2017. It's on track to add eight more by the end of next year. The company said that's a big reason why it reported unprecedented traffic at stores during the most recent quarter.

Another $1 billion brand

Cornell said Tuesday that its recently launched women's clothing brand "A New Day" has reached more than $1 billion in sales, making it one of a few of Target's private labels to do so, following the retailer's biggest success in "Cat & Jack." The kid's clothing line amassed more than $2 billion in sales just one year after its launch in 2016. "A New Day" was rolled out in fall of last year.

In the toy category — without Toys R Us in the market — Target is also investing heavily to win market share this holiday season. The company said earlier this year that it plans to add a quarter million square feet of space dedicated to toys across more than 500 Target stores by Nov. 2. Target will give a fuller remodel within the toy aisles to 100 stores. Overall, it will have more than 2,500 new and exclusive toys for sale this year, about double what it offered in 2017.

"We have made a major commitment to [toy] inventory to meet the demand we expect in stores," Cornell said about the upcoming holiday shopping season.

Target also said it will have more than 1,400 new and exclusive gifts for sale later this year, many under $15. That includes stocking stuffers like candles, chocolates, jewelry, iPhone accessories and pet toys.

The company made a big push with less-expensive, giftable items last Christmas. It said it will have as many as 30 fixtures in each of its stores this year featuring easy, grab-and-go gifts. In about 80 stores, Target will have personalization kiosks, where shoppers can pick from a handful of items like burlap sacks and ornaments to be embellished with a phrase or image of their choice.