CNBC reports that Target ” is testing an extension facility that helps it get online orders to more shoppers the day after they click ‘buy’.”
The first facility opened last month in Smyrna, Georgia, about 16 miles northwest of Atlanta. According to the story, “Drivers from Target-owned delivery service Shipt pick up packages from the extension facility and deliver them to customers’ doorsteps. The drivers are independent contractors, similar to those who deliver for Uber.
“The extension facility is part of Target’s effort to offer next-day delivery to more customers. Early this year, it said it would spend $100 million over the next three years to build a larger network of supply chain hubs to support the effort.
“More than 96% of the company’s online orders are fulfilled at stores. The retailer has opened supply chain facilities, dubbed ‘sortation centers,’ that then help group those boxes into denser and more efficient delivery routes. It has opened nine facilities and plans to have at least 15 by the end of January 2026. The extension facility adds to that model and expands the radius for faster deliveries.”
Target says that it may open additional extension facilities around the country if the Smyrna test works out.
KC’s View:
This strikes me as water trying to find its own level. Lots of companies, including Target, are trying to find the right balance with both giant distribution centers and store fulfillment, and all sorts of other models in between. It is all about finding a model that can achieve a high rate of speed and efficiency, and remains economically viable.
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