A target business advertises workers near its entrance in Encinitas, California on May 24, 2019.
Mike Blake | Reuters
Target said Thursday that the cessation of public holidays will be in line with last year, but it is rethinking its approach to roles to allow these workers to adapt to customers' new shopping habits during the coronavirus pandemic.
Compared to the first half of the year, twice as many Target employees will pick up online purchases on the same day at the roadside and in the store. Distribution centers will have more staff than last holiday season to ensure stores don't run out of popular items. Some employees focus on safety and cleaning. In all branches, employees receive mutual training so that they can switch from task to task if necessary, from disinfecting shopping trolleys to helping with pick-up at the roadside during peak hours.
Brian Cornell, CEO of Target, said his approach of staffing and serving customers over the holidays will emphasize flexibility – an issue that all retailers had to consider as the pandemic disrupts the way Americans shop . He reckons that "certain trends from earlier this year will continue into the holiday season," such as customers feeling safe in stores and looking for good value for money.
"Guests will certainly continue to be delighted by the ease and convenience as well as the contactless options for shopping through our digital channels," he said.
Early holiday predictions suggest that Christmas sales will increase only marginally this year as consumers cope with an uncertain economy or pull back due to the recession. Consultancy Deloitte predicted vacation sales could rise 1% to 1.5% this year, but said that will depend on whether high-income consumers indulge themselves and low-income families cut back on their spending.
Cornell declined to provide any preview of the typically busy shopping season. However, he said the retailer will make other pandemic-related changes, such as the start of vacation deals in October.
"We expect this to be a very different holiday season," he said. "We expect guests to start shopping earlier and shop throughout the season. We don't expect long lines on Black Friday mornings. But we definitely expect a very engaged consumer and a target guest who is looking forward to the holiday season to celebrate."
Melissa Kremer, Target's chief human resources officer, said current employees will be given extra hours and can choose to do tasks outside of their typical department, such as fulfilling online orders. More than 90% of the retailer's online orders are placed in stores.
The entire letting of the company during the holidays will look the same as last year despite increasing sales. Last year, Target hired 130,000 seasonal workers for the holidays, up from 120,000 in 2018. About 40% of these employees are typically hired as employees.
The goal was a sales boom during the pandemic, particularly in the second quarter that ended on August 1. This has exceeded Wall Street's expectations, setting a record 24.3% revenue growth in the same store. The comparable digital turnover has almost doubled.
Same-day services in particular have fueled sales throughout the pandemic. Target offers three options: Shipt, an online home delivery service that delivers groceries to customers' homes; Drive Up, the roadside pick-up service, and Order Pickup, the collection of ready-made purchases in-store. Revenue from the services increased 273% year over year in the second quarter. Drive Up saw the strongest growth – a jump of 700%.
Cornell attributed this growth to the different ways families spent money because they couldn't go to the movies or the typical summer vacation. Some also discovered Target's e-commerce options, he said.
As with other retailers, Target has shifted towards e-commerce. In the first half of fiscal 2020, more than 10 million new customers made purchases on their website. The demand for same-day options, all bought online, has quadrupled.
Unlike big box competitor Walmart, Target didn't hire hundreds of thousands of new employees during the pandemic. Walmart hired more than 500,000 people in its stores and supply chain during the pandemic and plans to hire 20,000 seasonal workers for its fulfillment centers for the holidays.