Dive Brief:
- Target's curbside returns offering will begin rolling out nationwide this spring after a successful pilot test in 2022, the retailer announced last week.
- Target expects Drive Up Returns, which allows customers to make free returns while staying in the car, to be available at all of its nearly 2,000 locations by the end of the summer.
- The option will be available on purchases made through a Target.com account, with most new, unopened items eligible for return within 90 days of purchase. Returns can be initiated through the Target app, and an employee will pick up the order once the customer arrives, completing the return.
Dive Insight:
As e-commerce demand continues to grow, traditional brick-and-mortar retailers have rolled out new order fulfillment options to reach customers in a variety of settings. For Target, introducing Drive Up Returns across the U.S. is a continuation of that process.
"This is what it means to be a truly omnichannel retailer, giving our guests the flexibility, ease and convenience to shop the way that works best for them and scaling capabilities across every facet of our business," Target Executive Vice President and COO John Mulligan said on an earnings call last week.
Drive Up Returns — which debuted in select cities last year — also adds a new wrinkle to Target's same-day order fulfillment services, which include pickup through Drive Up and delivery via its subsidiary Shipt.
Same-day services grew nearly 7% for Target last year, and they now make up more than 10% of its total sales. Since Target owns its same-day capabilities, including leveraging Shipt for delivery, it's much more economical for the retailer than other avenues of fulfillment.
"In fact, our average fulfillment cost per unit has come down 40% over the past four years as our same-day services have grown to account for over half of our digital sales," Mulligan said.
The majority of returns Target encounters are made in a store, but Mulligan said a meaningful portion are still shipped back to the retailer via a carrier, generating added costs.
"Not only is this a huge win for our guests who can now do even more at Drive Up, but it brings more efficiency to our returns process, with more resale opportunities and fewer expenses for mail-in returns," Mulligan said.
