Looking to take the lead and stay at the forefront of innovative retailing, Target has announced plans to invest heavily in its e-commerce business.

This fiscal year will see the chain of superstores spend approximately $2.1 billion on capital projects, $1 billion of which will be set aside to enhance its digital capabilities.

Financial focus will be shifted from the opening of new stores to developing a successful e-commerce strategy and ensuring the “Target experience” is evenly distributed across in-store and online.

Initially a slow adapter to the digital world, Target’s website is now considered to be on par with a number of rivals following the decision to revamp most of its e-commerce platform.

Customer experience

Target will also be looking to create a more “guest-centric experience”, which includes offering more locally relevant products to potential consumers, with demographics, location and other “guest-led factors” driving decisions.

The company is keen to strengthen its data, analytics and technology capabilities to deliver tailored digital experiences, loyalty programs and promotional offers.

Furthermore, in an effort to compete against Wal-Mart and AMazon, Target plans to increase the number of its stores that ship online orders from 139 to 350 by October this year.

Looking ahead

Despite the added pressure to gross profit margins, Target CFO John Mulligan says consumers who navigate between stores and the company’s digital stores shop up to three times as much.

Mulligan told Wall Street he expects to see in-store sales increase by 1% while digital transactions rise 40% during 2015.

To support this, Target is currently trialling its own loyalty app, REDperks, pointing consumers towards the best in-store deals. Users will also be able to earn points as they spend which can be used to claim discount off their purchases.

The beta version of the app is being used solely in the Raleigh, North Carolina and by invite only.