Dominick Reuter/Business Insider
- Target says it's soon launching Circle 360, a paid membership tier with unlimited same-day delivery.
- The move ratchets up the competition with similar offerings from Walmart and Amazon.
- Target fulfills 95% of its web and app orders from its fleet of about 2,000 stores.
Target is stepping up the competition with Amazon and Walmart with a new paid membership tier, Circle 360, that offers unlimited same-day delivery.
CEO Brian Cornell said Tuesday that the new Circle 360 service, which will be available starting April 7, will lean heavily on Target's Shipt service to "build unmistakable recognition for Target same-day delivery."
Launched in 2019, Target's Circle program now boasts more than 100 million members who visit five times more often and spend five times as much on average as the typical non-Circle shopper, Target says.
For a promo price of $49 for the first year, Target says, upgrading to the Circle 360 tier can deliver products to members in as little as one hour with no additional fees or markups. It says customers will also have access to Shipt's marketplace of other retail brands.
"It's less than $1 a week of the magic of Target delivered to your door," said Cara Sylvester, an executive vice president at Target who's the company's chief guest-experience officer.
Sylvester also said members could grab "everything from groceries to household essentials to the newest must-have item with no additional fees, no markups, and support from our preferred shoppers."
She said the $49 price would continue for cardholders of the Target-branded credit, debit, and reloadable Red Cards after the promotional period has ended.
Another perk for cardholders is an integration between their Red Card and Circle benefits on every transaction.
Same-day delivery from Target is currently two hours or less and requires either a $99 membership with Shipt (for orders over $35) or a $9.99 fee on eligible orders.
The retailer has invested heavily over the past decade in a strategy it calls "stores as hubs," which taps into its fleet of nearly 2,000 US stores to fulfill 95% of its web and app orders.
Target's drive-up services gave the company a significant sales boost during the pandemic, and Cornell said home delivery was "ready for a step-change" when it came to winning and keeping new customers.
Michael Fiddelke, the chief financial officer and chief operating officer of Target, also said that while it cost Target more to fulfill drive-up orders than in-store trips, drive-up guests went on to spend 20% to 30% more with the company.
Sylvester said same-day services had been a "shining star" for Target's digital growth: "Once guests try our same-day services, they love it. It is sticky in their lives."
Bloomberg reported last month that a new paid membership, code-named "Project Trident," was in the works to better counter Amazon Prime and Walmart+.