Target Unveils Paid Membership to Bolster E-commerce, Rivalling Amazon and Walmart

📝 SUMMARY: Target ($TGT) is stepping into the competitive subscription-based retail space with the introduction of Target Circle 360, a paid membership program set to launch next month. Priced at $99 per year, with a promotional offer of $49 until May 18 and subsequently for credit card holders, the program aims to attract customers through unlimited free same-day delivery on orders over $35, two-day shipping, and additional perks, emulating the successful models of Amazon ($AMZN) and Walmart ($WMT). This move comes as Target seeks to revive its e-commerce business and mitigate consecutive quarters of declining comparable sales, despite recent fiscal reports surpassing Wall Street predictions.

Target Circle 360 is designed to incentivize online shopping, offering conveniences such as home delivery within an hour, facilitated by Shipt, a gig-economy platform acquired by Target in 2017. The retailer's pivot to a paid membership model reflects a strategic effort to counteract a year-long dip in digital sales and reinvigorate its customer base. Moreover, Target plans to revamp its free loyalty program and credit card, making them more user-friendly and personalized, including automatic discount applications and extended return periods.

The introduction of Target Circle 360 aligns with broader retail industry trends, where subscription models have proven to be lucrative for giants like Amazon, with its Prime service, and Walmart, with Walmart+. These memberships not only generate significant revenue but also foster customer loyalty, encouraging higher spending. As Target ventures into this domain, it aims to replicate the success of its competitors, capitalizing on the appeal of convenience and exclusive benefits to enhance its market position and address the challenges of a rapidly evolving retail landscape.

🔍 SOURCE: https://www.cnbc.com/2024/03/05/target-launches-paid-membership-target-circle-360.html?&qsearchterm=target