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Target saw same-day pick-up and delivery soar by 278% last quarter as Americans flocked to stock up amid pandemic

Mary Hanbury   

Target saw same-day pick-up and delivery soar by 278% last quarter as Americans flocked to stock up amid pandemic
Retail1 min read
  • Online sales at Target soared by 141% during the first quarter of 2020.
  • Demand for its same-day services, such as buy online pick up in-store, also grew by 278%.
  • Operating income was down 58.7% thanks to the increased cost of being able to stay open during this time.

Online sales at Target have skyrocketed during the coronavirus pandemic.

The big-box store reported its first-quarter earnings early Wednesday morning – digital sales were up 141% during the quarter versus the year before; soaring 282% in April alone.

In a call with investors after reporting earnings, CEO Brian Cornell said that on an average day in April, Target was fulfilling more online orders than on Cyber Monday, one of the busiest shopping days of the year.

Demand for its same-day services, including its buy online pick up in-store and delivery through Shipt options, also grew by 278% during the quarter.

Operating income, a measure of the company's profitability, was down 58.7%, however, thanks to the increased cost of being able to stay open and as close to business as usual during this time.

"This is the reality of retailing during the crisis: those retailers that remained open got a spike in trade, but the cost of servicing that business was punishingly high," Neil Saunders, managing director of GlobalData Retail, said in a note to clients on Wednesday.

According to research from GlobalData, around 13.8 million shoppers that don't usually use Target visited its store or online platform for the first time during this period. Experts say that this could spell trouble for Amazon long-term, which had experienced difficulties in delivering and fulfilling their orders in a timely way during the height of the pandemic.

Consumers are becoming "increasingly aware that online shopping does not necessarily equate Amazon" and that even other retailers also offer convenient online services, UNC Kenan-Flagler Business School Professor Katrijn Gielens said in a recent email to Business Insider.

Read the original article on Business Insider

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