Dive Brief:
- Target's self-checkout changes and new tools for associates are building customer loyalty and driving traffic growth, CEO Brian Cornell said during a Q2 2024 earnings call Wednesday. Customers made 1 billion visits in the first six months of 2024, up more than 20% from 2019.
- Self-checkout changes, including limiting many lanes to 10 items, have led to “notably faster” checkout times in self-service lanes while also improving staffed checkout, according to Michael Fiddelke, EVP, CCO and CFO. About 15% more customers have used full-service checkout, and NPS scores related to wait times and interactions are the strongest in six years.
- Associates have used the generative AI chatbot built into their handheld devices more than 50,000 times since the technology was introduced in June, according to Fiddelke. The assistant can answer questions ranging from how to sign up a customer for Target Circle to how to restart a register in the event of an outage.
Dive Insight:
Target is working to improve speed and convenience in its stores to drive traffic growth and engage digital customers.
The core of this approach focuses on retail fundamentals, according to Cornell. Target seeks to ensure shelves remain stocked and customers quickly get the help they need during any shopping experience.
The generative AI chatbot, called Store Companion, plays a role in this strategy. The average Store Companion interaction takes less than one minute, which helps associates quickly return to helping customers, according to Fiddelke.
More efficient operations are helping Target keep up with rising demand for buy online, pick up in-store options. Same-day pick up usage grew in the low teen percentage during Q2, driving more than $2 billion in sales and contributing to $25.5 billion in revenue for the quarter, according to an earnings release.
The retailer is also seeing growth in the Target Circle 360 loyalty program, with membership up by 2 million since last quarter. Insights from customer data let Target send four times as many personalized offers compared to a year ago, according to Rick Gomez, EVP and chief commercial officer.
“All these efforts are in support of our ultimate goal, to deepen the already strong relationship we have established with our guests,” Cornell said during the call.
