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Target reported earnings for its fiscal Q4 2018 as well as its full fiscal year (ended February 2, 2019), revealing that it brought in over $74.4 billion in sales for the year, rising 3.7% year-over-year (YoY).
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Its full-year comparable sales grew 5.0% YoY, which is Target’s best performance in the metric since 2005 and a tremendous improvement from the 1.3% YoY it turned in at the end of 2017. Contributing to this performance were Target’s full-year comparable store sales, up 3.2% YoY, and its digital sales, which rose 36% YoY.
Target’s digital sales over the full year, and in Q4 specifically, were key to the retailer’s impressive results.
- The retailer posted strong digital sales growth throughout 2018. Over the course of its 2018, Target posted digital sales YoY growth of 28%, 41%, 49%, and 31% for each quarter, bringing its performance to new heights. And 7.1% of Target’s total sales in its fiscal 2018 originated digitally, up from 5.5% in its fiscal 2017, so its digital growth is now having a bigger effect on Target’s sales.
- Increased digital sales and capabilities helped Target bring in over $2 billion online in its Q4, the most it’s ever seen in a single quarter. Almost $2.4 billion of Target’s sales originated digitally in its Q4 2018, up 31% YoY and accounting for 10.4% of Target’s total sales in the quarter. And nearly 75% of Target’s digital sales were handled by stores, which may have helped it make its fulfillment process more efficient and affordable as it faced increased e-commerce volume.
And Target’s already made two key moves in 2019 that can further its digital and overall success.
- Target is expanding “Target Circle,” a free loyalty program that should draw in customers. The program — which was piloted in Dallas before being brought to Charlotte, Denver, Indianapolis, Kansas City, and Phoenix on February 19 — is free for customers and offers benefits like a personalized birthday present, 1% back on Target purchases, and shipping discounts. Offering this program for free should incentivize consumers to shop with Target more, and the shipping discounts specifically can benefit its digital business by making participants in the program more willing to shop with Target online.
- It’s inviting third-party brands to sell on Target.com as part of “Target +.” Target is bringing in outside sellers to build out its selection in key product segments. This has the potential to make the retailer a better destination for online shopping because consumers will be more confident that they’ll find what they want on Target.com, which should benefit Target’s overall digital performance.
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See Also:
- One stat in Target’s earnings proves stores are still the biggest defense against Amazon
- Target is raising its minimum wage as part of its latest barrage in the war for talent
- Sam’s Club has filed a patent for barcodeless scanning technology
Source: Business Insider – dkeyes@businessinsider.com (Daniel Keyes)