To improve package delivery efficiencies and lower shipping costs, Target will open three sortation centers: two in Chicago, and one in Denver, bringing the total number of these facilities in the U.S. to nine.
A sortation center quickly sorts and delivers orders that are packed in local stores, serving as a last-mile delivery solutions system. This strategy relies on treating the Target stores as the hubs for in-store shopping, same-day fulfillment services, and shipping orders. Typically, as with Walmart and Amazon, these tasks are outsourced to fulfillment centers.
According to the company, the sortation facilities also take the place of team members managing the packages in a store’s backroom, enabling them to fulfill more orders, free up space in the store, and consolidate and batch deliveries.
Shipt, the delivery service owned by Target, facilitates the fulfillment of local delivery orders and is currently piloting the use of large-capacity vehicles in Minneapolis which can carry up to eight times more packages per route.
The company intends to invest in the strategy to bring additional facilities to new markets.
Related: Amazon Readies Electric Delivery Vehicles; H-E-B Opens Ecommerce Fulfillment Center