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08/20/2021

3 Ways Target Is Improving Drive Up

Q2 sales through Drive Up have increased by nearly $1.4 billion over the last two years as Target keeps improving the curbside pickup service. Learn what technology enhancements it’s rolling out currently and what it would like to add in the future.
Jamie Grill-Goodman
Senior Editor
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“We added numbered parking lots so that we can find your black SUV among the 12 black SUVs that sit out in our parking lot waiting for Drive Up at any given time," said COO John Mulligan.

Target’s curbside pickup service, Drive Up, has grown to be the retailer’s largest same-day fulfillment option, spurring it to continue to roll out technology enhancements to the service.

Over the last two years, second-quarter sales through Drive Up have increased by nearly $1.4 billion, CEO Brian Cornell said, and for the spring season, they've expanded by double that amount.

Target launched its Drive Up service in 2018, expanding the same-day curbside pickup service to all 50 states by August 2019.

“Well before 2020, we’d already scaled our Order Pickup and Drive Up services nationwide as part of our multi-year roadmap,” Frank Bruni, Target senior VP, food and beverage supply chain, and CGT/RIS Executive Council member, told RIS earlier this year. “That gave us a solid foundation and the ability to improve, enhance and flex quickly to meet the changing needs of our guests in a year like no other.

Now, same-day services (in-store pickup, Drive Up and Shipt) account for well over half of Target’s digital sales and Drive Up accounts for more sales than pickup and Shipt combined.

[See also: 10 Retailers Ruling Curbside & BOPIS]

Comparable digital sales grew 10% in Target’s Q2 2021, building on record growth of 195% last year. The digital channel continues to be led by the big-box retailer’s same-day services, which together grew 55% this year on top of more than 270% last year, Cornell noted.

 

“Nearly half of this year's growth in our produce business has been driven by the growth in Drive Up orders."
Christina Hennington, Target's chief growth officer

In 2020, Target expanded its Order Pickup and Drive Up assortment in record time to include fresh and frozen grocery items nationwide, so shoppers could have more choices in free, contactless shopping. About 750 produce, dairy, bakery, meat and frozen items were added to same-day fulfillment services as of June 2020. In its second quarter of 2021, which ended June 30th, Target added another 5,000 items to the assortment available for pickup and Drive Up, ranging from items in adult beverages to fresh pet food, meal kits, and greeting cards. The move is working to boost its sales. Target saw double-digit growth in its fresh categories, benefiting from the expansion in the number of items available for Drive Up, said chief growth officer Christina Hennington.

“Nearly half of this year's growth in our produce business has been driven by the growth in Drive Up orders,” she noted.

[See more: Top 10 E-Commerce Retailers and Their Digital Experience]

“Drive Up, which remains our highest-rated service, saw an increase in guest satisfaction compared with last year, on top of last year's improvements over 2019,” said COO John Mulligan. “And we continue to find ways to enhance our industry-leading pickup and Drive Up capabilities.”

Target continues to roll out the following technology enhancements to Drive Up:

  • Functionality to provide backup suggestions when an item is unavailable
  • A chainwide rollout of numbered parking spaces for shoppers using Drive Up
  • Ability in the app to seamlessly designate an alternate person to pickup an order

The retailer has also added more Drive Up locations and is working on adding canopies to help with the weather, Mulligan noted.

“We added numbered parking lots so that we can find your black SUV among the 12 black SUVs that sit out in our parking lot waiting for Drive Up at any given time,” he said. “And we added substitutions.”

Mulligan noted the retailer would like to add things to the curbside service like clearance items and the ability to do returns.

“I think there's a lot further we can go there from a category or product perspective,” said Mulligan. “The other side is just improving the service itself, and you'll see us continue to do that.”

[See more: Evolution of How Consumers Shop]