Target (NYSE:TGT) has rolled out free shipping for orders more than $50 as the retailer works to simplify online ordering and create a more competitive omnichannel experience.
"While we're not the first retailer to provide free shipping, we think our new offer is among the most compelling in the industry in terms of value and breadth," said Jason Goldberger, senior VP, Target.com and mobile. "And unlike some other online retailers, we don't exclude a large percentage of our assortment – only a small number of heavy or oversized items like sofas."
Why now? "We've made meaningful improvements to the performance of Target.com for the last several months," said Goldberger. "But the reality is, our guests continued to tell us that our shipping policy was frustrating and confusing to them, and holding us back. In fact, our internal research told us that more than half of Target.com shoppers who abandoned their shopping carts said their decision was related to shipping costs."
Target's conversion rates are on the rise: up 42 percent on mobile and 36 percent on desktop year-to-date, thanks to some simple tweaks. Target now offers an expanded assortment, added store pickup and improved overall site performance. There has also been a move to become more competitively priced.
Target continues to win accolades for its mobile shopping app, Cartwheel, which leads all other major retailers in terms of time shoppers spend browsing and buying on the app. Target shoppers spent 251 percent more time on Cartwheel in March than a year earlier, according to comScore.
Continued digital transformation is a top priority at Target. "We need to accelerate our digital transformation and become a leading omnichannel retailer," said interim CEO John Mulligan during a recent earnings call. "To do this, we will move quickly to become more flexible in how we serve our guests, eliminating barriers that prevent them from shopping with us where and when they want."
To that end, Target has created a digital advisory group consisting of leaders from tech companies: Match.com CEO and OkCupid founder Sam Yagan, Orbitz Worldwide's Roger Liew, Bain Capital Ventures' Ajay Agarwal and Accompani CEO/former Google Analytics lead Amy Chang.
"We've doubled down on digital, including bringing in an entirely new leadership team – recruiting some of the best e-commerce talent in the world in site merchandising, mobile and data science," said Goldberger. "We're still actively hiring and we've got big, cutting-edge work underway."
Free shipping brings Target more in line with other retailers, but the next step will have to do more.
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