Target is gearing up to launch a paid membership program called Target Circle 360 next month. This move aims to increase revenue and market share amidst cautious consumer spending.
Target Circle 360 is designed to rival Amazon Prime and Walmart Plus. It builds on the existing Circle program and Circle credit card with several enhancements.
Members of Target 360 will enjoy free two-day shipping, same-day delivery on orders over $35 through Shipt, and no delivery fees. "From groceries to household essentials to the newest must-have item with no additional fees, no markups, and support from a preferred shopper," explained Cara Sylvester, Target’s chief guest experience officer.
An introductory offer allows new members to join Target Circle 360 for $49 for the first year, after which the fee rises to $99 annually. The offer runs from April 7 through May 18.
CEO Brian Cornell outlined the membership as part of Target's growth roadmap. This plan aims to boost sales, regain market share, and ensure profitable growth in 2024.
The company is also enhancing its free Circle rewards program. Deals will be automatically applied at checkout, eliminating the need for shoppers to add offers manually.
Additional benefits include partner perks with Ulta Beauty and Apple and personalized rewards based on shopping behavior. "They'll continue to receive partner perks with Ulta Beauty and Apple, and even more rewards through personalized bonuses based on their shopping behavior," Sylvester noted.
Target Circle credit card holders will receive an extra 5% off each visit, free two-day shipping, and an extended return period.
Despite these efforts, Target reported a 4.4% decline in year-over-year sales in stores open at least a year for the fourth quarter. Online sales dropped 0.7%, showing some improvement over the previous quarter's 6% decline.
CFO and COO Michael Fiddelke expressed a cautious outlook for 2024, citing soft demand, especially in discretionary items. "More specifically, on the discretionary side of our business, even as we have seen improving trends over the last two quarters, overall demand remains soft," he mentioned.
Target anticipates a 3% to 5% decrease in same-store sales for the first quarter.
