Interesting to see that Brian Cornell, CEO of Target announced that digital revenues have grown by 25% year-on-year for the past four years, and that this is attributed to the presence of physical stores and branches.
Target stores are no longer being used as just another shop, but each one acts as a mini dispatch centre which handles digital orders. By shipping from individual stores they have found that the cost of the digital fulfilment is reduced by not having the fulfilment centre costs.
Despite a consumer spending squeeze, as 2018 progresses we can expect to see more retailers expanding their fulfilment offering, catering to the complex and individual needs of their customers and of course fighting the battle against Amazon.
The smartest will be rethinking how they use physical stores and innovating further in this area.
There is a couple of themes that we’ve seen in our ongoing coverage of digital transformation in the retail sector. One is the idea of ‘learning to love the store again’ instead of blindly trying to be Amazon; the other is the importance of delivery as a fulfilment channel.