Target Corporation (TGT) has decided to offer its online shoppers free shipping on all products starting from Oct 22 till Dec 20. The announcement comes quite early since it is the Thanksgiving weekend that kicks off the official holiday season.
For Target, this is a good move as the retailer tries to spring back from its devastating 2013 holiday season. Last December, the company faced a massive security breach, wherein card information of more than 70-80 million customers was hacked few days before Christmas.
As a result, footfall nosedived and sales slumped to record lows. Moreover, the breach caused the ouster of CEO Gregg Steinhafel and resulted in litigation expenses of $148 million. Almost a year later, Target is still trying to mend its dented reputation as well as to improve its profits.
As the holiday season accounts for a major chunk of yearly revenues and margins, retailers try all possible and innovative methods to win over customers. Moreover, Target’s free shipping offer is designed to resist stiff online competition from the likes of Amazon .com Inc (AMZN) as well as other mega brick and mortar retailers like Wal-Mart Stores Inc. (WMT), which already have competitive shipping policies.
As more and more customers shift toward online shopping, it is becoming very necessary for retailers to improve their omni-channel capacities and provide miscellaneous associated facilities. Free shipping is a very important facility as many online shoppers abandon transactions given the high shipping costs.
With a revamped merchandise assortment and free shipping, Target’s new CEO Brain Cornell, former executive of Pepsico, Inc. (PEP), expects a good performance over the holiday season. Target will offer more than 65,000 products at compelling prices, this year in collaboration with the likes of Mossimo Black, Merona, Mossimo Supply Co., Beaver Canoe for Target, Threshold, Sam & Libby, Circo, Cherokee, and TOMS for Target.
Target will also spend considerably on promotions as the holiday season appears to be the most promotional one ever. Apart from free shipping, Target has many other initiatives lined up to drive in customers.
Instead of the usual 7-day time frame, the company will offer longer period of price matching, from Nov 1 till Dec 24. It will also offer a new deal everyday on Cartwheel along with a new toy at 50% discount from Nov 2 to Dec 24. The REDcard holders, will continue to get 5% discount on all purchases, free shipping at Target.com, and an additional 30 days for returns.
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