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You are here: Home / Chic & Current / Retail Watch / Target Launches Bold ‘Amazon-Style’ Overhaul to Reclaim Shoppers

Target Launches Bold ‘Amazon-Style’ Overhaul to Reclaim Shoppers

July 21, 2025 by Emily Grant

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Forbes – X

Target’s fortunes have deteriorated precipitously. In Q1 2025 the chain’s comparable store sales plunged about 3.8% year-over-year, dragging quarterly revenue down to roughly $23.8 billion (from $24.5 billion a year earlier). The stock has tumbled about 60% from its 2021 high, erasing over $12 billion in market value as investors grow pessimistic. CEO Brian Cornell has conceded Target is in its toughest stretch in decades, echoing analysts who warn the company is “lost its way on several fronts.” 

As GlobalData’s Neil Saunders bluntly put it, this looks like a business that has made “too many mistakes and has lost its way”. The timing is especially cruel: in early 2025 Target reversed some diversity initiatives, triggering organized boycotts (particularly from local community groups) that have further dented store traffic and online sales.

Pressure Mounts

X – Pop Crave

As Target grapples with these setbacks, alarm bells are sounding across the industry. Foot traffic is down sharply – about 5.7% year-over-year in mid-March 2025, extending multiple weeks of declines – and digital sales growth has slowed to the mid-single digits. Shoppers report finding many basic items (detergent, shampoo, etc.) out of stock, sending frustrated customers to Walmart, Amazon, and discount chains. 

On Wall Street, analysts have reacted by slashing their forecasts. Oppenheimer’s Rupesh Parikh noted that “the market’s written off Target in terms of [sales growth], so the expectation is hopefully next year you start to see stronger trends”.

Amazon’s Dominance

Wikimedia Commons – Auledas

Meanwhile, Amazon looms larger than ever over the retail landscape. The e-commerce giant offers hundreds of millions of products and moves billions of packages each year through its massive fulfillment network. Its newly launched Amazon Haul channel epitomizes the threat: it features thousands of low-cost items (mostly under $10–$20) shipped from China at ultra-low prices. Prime customers can now opt for these bargain goods with delivery windows of one to two weeks. 

As Amazon’s Dharmesh Mehta emphasizes, “finding great products at very low prices is important to customers,” and Haul is explicitly designed to deliver on that promise. 

Supply Chain Revolution

X – Trung Phan

The pressure isn’t coming from Amazon alone – Chinese discounters have rewritten the global supply chain playbook. Platforms like Temu and Shein ship roughly 900,000 packages per day each into the U.S. by sending items straight from factories (usually in China) to consumers. This factory-to-door approach slashes costs and allows unbeatable pricing. UPS’s CEO Carol Tomé recently told analysts that her carriers have seen these volumes explode – “quite explosive” activity from two new customers (widely understood to be Temu and Shein). 

Delivery outfits and air freight networks are scrambling to handle millions of small parcels instead of pallets. As delivery expert Andrew Townsend of SpeedX notes, “the only growth that’s propping up the last-mile market is coming from cross-border e-commerce”.

Target’s Bold Response

Wikimedia Commons – Mds08011

Here’s where it gets interesting: Target has decided to join the fray. In a pilot confirmed by Bloomberg, the company is testing a factory-direct shipping service of its own. Under this program, items (especially apparel, home goods and other non-food items) would ship directly from manufacturers to customers’ homes, bypassing Target’s normal warehouses. 

A Target spokesperson emphasizes that the change won’t dilute quality: “in all cases, we uphold the high quality, responsible sourcing and sustainability standards” that consumers expect. This experiment is the centerpiece of Target’s $15 billion growth strategy unveiled in March 2025. By 

Regional Impact

X – Chad Griffiths

Target is rolling out the pilot through its regional sortation centers, reshaping local logistics along the way. The retailer already operates ten large sortation facilities in states like Minnesota, Texas, Colorado, Illinois, Georgia, Florida and Pennsylvania. In each sort center, drivers collect and batch orders from roughly 30–40 stores per day, then route them for local delivery – a model that speeded up same-day shipments and cut costs. Target is investing about $100 million to nearly double its sortation network to over 15 centers by 2026. 

As Chief Supply Chain Officer Gretchen McCarthy explains, this expansion lets Target “move faster and with more precision — while controlling costs and expanding our network capacity — for years to come”. 

Consumer Response

Tima Miroshnichenko from Pexels

How are shoppers reacting? So far, feedback is cautiously mixed. Many Americans are willing to trade faster delivery for lower prices, especially as inflation bites – echoing the “treasure hunt” appeal of Temu’s model. Surveys show that while 88% of consumers still value same-day delivery, a growing segment is content to wait a week or more if it means saving significantly. 

In early pilot markets, some customers applaud the sharply discounted prices and expanded selection. One participant told Retail Dive that she could save 20% on a pair of jeans she always wanted, although the order took two extra weeks to arrive. 

Competitive Landscape

X – Forbes

Complicating the picture is a major policy change: effective May 2025, the U.S. eliminated the low-value import exemption for Chinese parcels. Now even cheap items (under $800) are hit with tariffs up to 145%. In response, Temu has said it will fulfill all U.S. orders through domestic sellers, and Shein is rapidly building U.S. distribution centers. According to U.S. Customs, daily parcel volume from China plunged from roughly 4 million a day to about 600,000 after the exemption was lifted. 

This 85% drop forced many retailers to consider alternatives. Some of the affected brands find a silver lining: Portless Logistics CEO Izzy Rosenzweig reports that with a temporary tariff cut to 30%, “we’re doing a ton of shipments…brands are doing marketing again. 

Slide 9 – Strategic Integration

Wikimedia Commons – Wikideas1

The factory-direct pilot is just one piece of a sweeping $15 billion overhaul. Target is simultaneously doubling down on other growth engines. For example, the company’s Target Plus marketplace (third-party sellers on Target’s site) is growing at double-digit rates, and executives aim to expand it from about $1 billion in sales to $5 billion by 2030. Its Roundel media business (ads on Target’s platforms) and AI-driven inventory systems are also being supercharged. 

CEO Brian Cornell puts it this way: Target is building today’s “Tarzhay,” a destination of “everyday discovery and delight for millions of families”. 

Future Implications

Monster Ztudio via Canva

All of this raises a big question: will consumers and competitors let Target pull it off? The answers are far from certain. Industry voices are divided. Carol Spieckerman, a longtime retail analyst, warns that it may be the wrong move at the wrong time – “just really a major distraction” when Target has more basic problems to fix. She argues that adding a factory-direct channel may be “trying to solve a problem that doesn’t exist, while ignoring the problems that do. 

Filed Under: Retail Watch, Uncategorized

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