For the last four quarters, Target’s sales have been in a slump: from $30.195 billion to $23.846 billion, then $25.211 billion, and $25.270 billion in the quarter that ended on November 1, 2025. Net income has been sinking, going from $1.1 billion to $689 million. For the last 12 quarters, sales have been weak or falling.
Target is looking at multiple initiatives to turn things around. One is changing how they get products to customers. In the November 19 earnings call, the last before his retirement, CEO Brian Cornell said, “We pioneered the stores-as-hubs model for digital fulfillment.”
Cornell’s successor, Chief Operating Officer Michael Fiddelke, said, “As a reminder, we already reach around 80% of the U.S. population with same-day delivery powered by Target Circle 360, where sales grew more than 35% again this past quarter and around 99% of the U.S. population is already eligible for 2-day shipping. And now with our evolving market fulfillment strategy that includes expanding these learnings to an additional 35 markets, more than half of the U.S. is eligible for next-day shipping, and we expect to meaningfully expand that reach in the coming year.”
The Wall Street Journal reported on some details of how the company is trying toexpand customer choices in receiving products and to improve overnight delivery. One step is shifting ship-to-home online orders from the busiest stores to ones that are less busy, reducing strain on what could otherwise become single points of failure. Another is opening facilities focused on overnight deliveries. A third is employing gig workers to manage specific delivery types.
The intent is to improve customer experience while speeding delivery and cutting costs by matching methods to needs.
“Increased competition is causing retailers to embrace rapid-delivery models, including overnight and 30-minute delivery,” says Zach McHugh, principal at vertically integrated industrial CRE private equity firm Sitex Group. “This is a resource-intensive effort that requires flexible supply and delivery chains with well-positioned ‘last-mile’ or ‘last-block’ warehouses that can accommodate delivery vehicles suited to the local environment. Each location has different demands and creates unique challenges for efficient, cost-effective service, so there is no universal prescription for success.”
“Target's move to improve next day delivery service makes a lot of sense in urban and higher density areas where they can optimize a variety of existing real estate assets and provide customer choice of fulfillment,” says Bob Hess, vice chairman of global strategy at Newmark.
I use different methods of fulfillment based on what I need,” Gretchen McCarthy, the company’s chief supply chain and logistics officer, told the Journal. “We believe there’s a use case for same-day delivery, there’s a use case for drive-up, there’s a use case for ship-to-home brown box, and, of course, the bread and butter of our business, there is a use case for people coming into our stores.”
The concept sounds solid and dependent on details, planning, and math. “Next-day delivery performance comes down to network math: inventory positioning, node density, and load balancing,” Mark Ang, CEO of logistics firm GoBolt, tells GlobeSt.com. “Retailers like Target are essentially solving a dynamic optimization problem, pushing volume away from overloaded nodes while maintaining the shortest possible ‘distance to customer.’”
The decisions include tradeoffs. The more distributed fulfillment, the more complex it is to manage. Central hubs “improve efficiency but lengthen delivery windows.”
“Network performance depends on how effectively retailers can rebalance inventory and capacity in real-time as conditions shift. In volatile environments, static plans break down quickly,” Nishith Rastogi, CEO and founder of logistics technology company Locus, recently acquired by IKEA’s largest retailer Ingka, tells GlobeSt.com. “Agility consistently outperforms prediction.”
“Next for Target could be more drone delivery to compete in these frontier regions, or to double down in their current framework,” Newmark’s Hess adds.
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