VOL. 129 | NO. 76 | Friday, April 18, 2014
Target Expands Subscription Service Tenfold
ANNE D'INNOCENZIO | AP Retail Writer
NEW YORK (AP) – Target is vastly expanding the goods available to order by subscription as it fends off its biggest non-traditional retail rival, Amazon.com.
The nation's second-largest discounter first dabbled with subscriptions last September, trying to win over haggard parents by making available 150 baby care products.
Target expanded that program more than tenfold this week to nearly 1,600 items across a much wider array of products. Everything from beauty products and pet supplies to home office supplies, are now available for regular delivery.
Target, based in Minneapolis, is playing catch up in the subscription business, which has exploded as companies test consumer appetites for almost every niche, from socks and razors, to sex toys.
Amazon.com has been a big force in the subscription space. It offers its Subscribe and Save services. It also offers free, two-day shipping on many goods through its Prime memberships.
Target is seeking to offer that same kind of convenience and win back hard-pressed customers who want convenience as much as they want savings.
The retailer's free subscription program allows people to schedule shipments in four, six, eight, 10 and 12-week installments.
Jason Goldberger, senior vice president of Target.com and its mobile division, told The Associated Press in an exclusive interview this week that the subscription services is expanding much more rapidly than had been expected at Target, driven by very strong demand.
While Target does not break out online sales, Goldberger would only say that since the subscription service began just over six months ago, the babycare items that were part of the rollout now account for 15 percent of online sales for that specific category.
Target's subscription service has its own perks.
The discounter recently added a five percent discount on items ordered through the program. Customers using a Target branded card get another five percent discount.
The subscriptions are part of a broader move online by Target.
It recently began allowing people to order and pay for goods online, and pick them up at the store. The number of products that can be ordered online has nearly doubled to 60,000 since the program first began in October.
But Target is late to that game, with Sears and Wal-Mart both allowing online orders for several years now.
It's been a quick payoff, however. The pickup program now accounts for more than 10 percent of Target's online business, Goldberger said.
Target is still determining how many products will be available by subscription, Goldberger said.
"Our focus is how to serve the Target guests, not look at a competitor," Goldberger said.
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