Target (NYSE:TGT) is proactively building out mobile—apps and m-commerce initiatives—as part of its latest growth strategy, and for good reason: Mobile constituted 40 percent of all digital orders during the fourth quarter, according to Chairman and CEO Brian Cornell.
"Mobile is becoming increasingly important to all digital retailers, and given the profile of our guests, it's particularly important for Target, as mobile accounted for more than 40 percent of our digital orders in the fourth quarter," Cornell said during a conference call with analysts. "And notably on Black Friday, 10 percent of our iPhone app revenue was from guests purchasing on their phone while they were simultaneously shopping one of our stores."
To better serve the mobile shopper, Target has updated its app with "brick-and-mobile" in mind. Users can now create shopping lists and add items from the Carthwheel app.
Signs located throughout Target stores promote Cartwheel and prompt shoppers to download and use the app—a smart move given the frequency with which shoppers are using Cartwheel and making mobile purchases while in stores.
Target has also reduced its minimum order threshold for free shipping from $50 to $25.
"This new minimum is among the most compelling offers in digital retailing, putting us ahead of many of our key competitors," said Cornell. "In our digital channel for the fourth quarter overall, we saw a high single-digit increase in visits, driven entirely by growth in mobile, which includes both tablets and smartphones."
"Orders were up well over 50 percent, driven by very strong conversion increases on both the conventional site and mobile," he said.
Target is also strengthening omnichannel operations by including flexible fullfillment to support digital growth. This includes ordering online and picking up in stores and a new ship-from-store capability now being rolled out. The retailer is also testing dedicated parking for shoppers using the feature.
The 2014 holiday season was the second season for in-store pickup at Target, and customers made more than 400,000 store pickups during Black Friday week.
The retailer is also wooing younger shoppers by launching promotions and offering exclusives via mobile app Snapchat.
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