Target wants to control its online destiny.
This story first appeared in the August 10, 2009 issue of WWD. Subscribe Today.
The Minneapolis-based mass retailer plans to build and manage its own platform for target.com in time for the 2011 holiday season. Besides assuming day-to-day operations of the e-commerce site, the new target.com will be redesigned and rebranded.
Target in 2001 entered into an agreement to open an e-commerce store on Amazon.com. Target.com is run by Amazon, which provides technology services, order fulfillment and customer service.
Now the discounter wants to maximize its online profits — Amazon.com receives per unit fees and annual fixed fees — and wants the flexibility to evolve quickly to hold the interest of fickle consumers. “[In order] to deliver a customized multichannel experience for Target’s guests, we believe it is in Target’s best interests to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations,” said Steve Eastman, president of target.com.
“We want [Target.com] to be an enhanced site for our guests,” said Kelly Basgen, a Target spokeswoman. “We’re planning to update and modernize many functions on our new site.” For example, there will be enhanced search and navigability, checkout/cart experience and branding and signage. Categories will be expanded, including some not now sold online, unique experiences within product categories will be created and possibly a buy online/pick-up at the store option.
Target’s Red Hot Shop, which bowed in June, is an example of future features. Described as “a monthly dose of chic, unique & sometimes offbeat,” it features a dozen or more items curated by Daily Candy. “As trendspotters, they pick very cool and trendy items from outside vendors,” Basgen said. This month, there’s a Heidi Merrick Ikat-print skirt and Homer red gingham shoes, $54.99 each.
Basgen would not discuss the cost of the project. “We’re confident that the benefits, financial and otherwise, of managing target.com internally, will outweigh the costs,” she said.
Target doesn’t break out sales for its e-commerce business. Fiscal 2008 company revenues were $65 billion. Target.com was the fourth-highest-visited e-commerce site on Cyber Monday, one of the busiest online shopping days, following eBay, the Amazon sites and walmart.com, according to IT Facts.