Target takes aim at Amazon, expands home delivery of products
04/17/2014 4:17 PM
04/17/2014 4:18 PM
Target is taking aim at rival Amazon by expanding a service that regularly delivers products to shoppers’ homes.
The nation’s second-largest discounter started its subscription service in September by offering 150 baby products, like baby wipes and diapers, for delivery.
Target is expanding that program tenfold by adding nearly 1,600 items, from beauty products to pet supplies to home office supplies. The discounter also is offering a 5 percent discount on items ordered through the program and 10 percent off to those using a Target credit card when ordering through the service.
Target is playing catch-up in the subscription business, which allows shoppers to arrange for regular delivery of certain products. The subscription business has exploded in recent years as companies test shoppers’ appetites to have items as varied as socks, razors and jewelry delivered regularly.
Amazon.com has been a big force in the subscription space through its Subscribe & Save service, which offers a 15 percent discount on an array of necessities that are scheduled for delivery. It also offers free, two-day shipping on many goods through its Prime memberships, which cost $99 a year.
The Seattle-based company didn’t immediately return emails seeking comment for this story.
Companies have been trying to figure out the right business model. Wal-Mart Stores, the world’s largest retailer, tested a service called Goodies, a snack subscription service that it started in 2012 but discontinued last year. Goodies let shoppers taste different surprise snacks for a monthly fee of $7.
For its part, Target is hoping to win back hard-pressed customers who want convenience as much as they want savings. The retailer’s free subscription program allows people to schedule shipments in four, six, eight, 10- and 12-week installments.
Jason Goldberger, senior vice president of Target.com and its mobile division, told The Associated Press this week that the subscription service is expanding much more rapidly than the company expected, driven by very strong demand.
While Target does not break out online sales, Goldberger said that since the subscription service began just over six months ago, 15 percent of online sales of the eligible items are subscriptions orders.
The subscriptions are part of a broader move online by Target. In October, it began allowing people to order and pay for goods online and pick them up at the store. The number of products that can be ordered online has nearly doubled to 60,000 since the program began. Sears and Wal-Mart also both allow online orders.
As for its subscription business, Target is still determining how many products will be available, Goldberger said.
“Our focus is how to serve the Target guests, not look at a competitor,” Goldberger said.
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