Target Launching Paid Membership Program
Following the release of its better-than-expected Q4 and fiscal year 2023 earnings report, Target Corp. shared that it will introduce its Target Circle 360 membership program next month. CEO Brian Cornell and EVP and Chief Guest Experience Officer Cara Sylvester shared specifics of the new initiative during the company’s 2024 Financial Community Meeting.
Building on its loyal customer base, with its Target Circle loyalty program currently boasting more than 100 million members, the retailer will make Target Circle 360 available for customers on April 7. The service will offer unlimited same-day delivery in as little as one hour.
The membership program will be available for a promotional price of $49 per year, with that also being the standard price for Target Circle cardholders. After May 18, the price will be $99 per year. Users will also have access to Target-owned Shipt’s multi-retailer marketplace, so they can purchase items from other stores while they shop Target.
“An extension of the same-day capabilities we’ve built since our acquisition of Shipt in 2017, Target Circle 360 members can order everything from groceries to household essentials to the newest must-have item with no additional fees, no markups and support from a preferred shopper,” Sylvester explained.
The new initiative is part of the retailer’s larger move to upgrade its loyalty program experience, which is partially based on customer feedback that saving money could be even easier and more frictionless. Target Circle will now encompass three programs, including its base loyalty program, its Target Circle card and the new Target Circle 360.
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As part of the relaunch, members of the free loyalty program will now be able to scan their barcode at physical checkout to have deals automatically added to their purchase, with those deals also being tallied automatically during e-commerce checkout.
“By evolving and upgrading our experience, we’re going to make it even easier for our guests to interact with Target in a way that feels right for them,” said Sylvester. “We’re confident with the relaunch of Target Circle that not only will our current guests shop us more often, but we’re well-positioned to welcome even more shoppers to Target.”
Meanwhile, digital business improvement, growth in Drive Up sales and increased foot traffic all helped Target boost sales during its fourth quarter and full fiscal year 2023, highlighting what the retailer calls a rally to change its business momentum.
In Q4, total year-over-year comparable sales declined 4.4%, while total revenue of $31.9 billion was driven by sales growth of 1.6% and a 9.8% increase in other revenue. Comparable-store sales were down 5.4% and digital comparable sales were down 0.7%, but up more than 5 percentage points from the previous quarter. Operating income was $1.9 billion, an increase of 60.9% over 2022.
As for FY23, operating income grew 48.3% to $5.7 billion, and full-year gross margin rate was 26.5% compared with 23.6% in 2022. The retailer saw a 5.3% operating income margin rate compared to 3.5% in FY22, and GAAP EPS was up nearly 50% over the previous fiscal year.
Minneapolis-based Target Corp. is No. 6 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America, with nearly 2,000 locations. PG also included the company on its Retailers of the Century list.
