“Despite the rapid growth that we’re seeing online, as we all know, the majority of retail shopping in America still takes place in a physical store,” Brian Cornell, Target CEO and chairman, said on a call with representatives from the media on Wednesday, Aug. 16, after the big-box retailer reported a better-than-expected second quarter.
Cornell’s statement is true today, but retail experts believe it’s more prudent and profitable to take the long view. One-fifth of the $3.6 trillion retail market in the U.S. is set to shift online over the next five years, Stacy Mitchell, co-director of the Institute for Local Self-Reliance, and co-author of “Amazon’s Stranglehold,” told TheStreet. Amazon is already on track to capture two-thirds of that enormous share.
Target is now remodeling 110 of its 1,802 stores, to be completed at the end of this year, and, on Monday, the retailer announced its plans to acquire Grand Junction, a transportation tech company, for an undisclosed amount. Target said the purchase allowed it to now expand its same-day shipping tests throughout New York City and its next-day delivery service, Target Restock, in the Denver and Dallas markets.
Walmart, on the other hand, has taken a different approach to growth. The discount giant has been on a recent acquisition frenzy of online apparel retailers that began with its $3.3 billion purchase of e-commerce company Jet.com in August. Walmart’s acquisition of Jet.com helped it boost online sales by 63% in the first quarter and allowed it to begin testing…