LAS VEGAS — Target is pushing to solve two of its top supply chain challenges — inventory management and trailer unloading — via technology improvements, according to Chief Supply Chain and Logistics Officer Gretchen McCarthy.
The retailer's wide-ranging mix of inventory helps it attract shoppers, but it also can be "hard to predict, hard to forecast, hard to move," McCarthy said during a panel at Manifest 2025 on Wednesday. This means the company must weigh what products to prioritize in a pinch and accept "that not all inventory is created equal."
"If you don't have the right inventory coming through your supply chain, you're going to gum up the works faster than anything," McCarthy said. "You're going to have empty shelves, and you're going to have a full supply chain."
McCarthy said Target has the opportunity to reduce its owned inventory by leveraging AI to improve the retailer's forecasting algorithms, inventory positioning and decision making with the products it has.
Strengthening inventory management has been an ongoing priority for Target, particularly after a prolonged battle in 2022 with excess stock strained its financial performance. Enhanced demand forecasting, along with leveraging AI and machine learning, was among the company's supply chain focus areas, EVP and COO Michael Fiddelke noted on an earnings call last year.
Target is also testing ways to solve issues stores face with unloading trailers from the company's distribution centers, McCarthy said. Currently, the unloading process can "make or break" a store leader's day, she noted. That's because it can be difficult to perform efficiently, with thousands of SKUs and cartons for employees to sort through.
"We're testing technology and automation within a few of our buildings to improve that process, actually sort the cartons to the actual custom block location of a store, so that we can speed up that unload," McCarthy said. "We can make it easier, take some of the extra sortation that needs to happen, and ultimately be better partners for our stores."
Target's pursuit of an efficient inventory mix and flow into stores comes as customers are prioritizing in-stock reliability both online and in stores, McCarthy said.
Having accurate inventory data to determine if an item's available and eligible for a customer's preferred order fulfillment method is key, in addition to displaying that availability on the retailer's app. McCarthy said guests have used the Target app to determine ahead of time if their local store had what they were looking for.
"That kind of understanding really caused us to step back and think about, well, the front door to a guest isn't the Target store," McCarthy said. "The front door to a guest is our app."
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