Target is adjusting how online orders move through its network, shifting fulfillment away from its busiest stores and adding localized sorting and delivery capacity. The changes reflect a more deliberate effort to balance delivery speed with store conditions, labor availability, and shipping cost control.
Rebalancing Store Fulfillment to Relieve Pressure Points
Target is piloting a series of fulfillment changes aimed at improving overnight delivery while addressing operational strain inside its stores. In Chicago, the company has stopped fulfilling ship-to-home online orders from 18 of its busiest locations, shifting that volume to less-busy stores in the same market. In Cleveland, it has opened a new facility designed to support next-day delivery. In markets such as San Diego, local gig drivers are handling delivery of select packages.
The moves reflect a broader effort to speed up delivery, lower shipping costs, and improve the in-store shopping experience as the retailer works to regain momentum after several years of weak sales. The company reported its 12th consecutive quarter of soft or declining sales last month. Comparable sales fell 2.7% in the three months ended Nov. 1, though digital comparable sales rose 2.4% and now account for 19% of overall revenue, up from 7.5% in 2019.
Gretchen McCarthy, Target’s chief supply chain and logistics officer, said the company is focused on offering customers multiple fulfillment options, from curbside pickup to next-day delivery in traditional shipping boxes, alongside in-store shopping. The intent is not to push customers into a single channel, but to match fulfillment methods to different needs and occasions.
That flexibility has become increasingly important as retailers face mounting pressure to meet fast-delivery expectations without absorbing unsustainable last-mile costs. According to trade reports, shipping and fulfillment expenses remain one of the largest margin headwinds in retail, particularly for next-day and same-day service.
Sortation Centers and Gig Delivery Redraw the Last Mile
Target’s fulfillment experiments build on its long-running strategy of using stores as mini-distribution hubs. Roughly 2,000 Target stores sit within 10 miles of about three-quarters of the U.S. population, giving the company proximity advantages similar to those pursued by rivals Amazon and Walmart. Amazon has restructured its logistics network to position inventory closer to consumers, while Walmart has expanded same-day delivery to most of the country by using stores and freelance drivers.
But fulfilling online orders from stores introduces friction. Items shown as available online can sell out before orders are completed. Store aisles become crowded with fulfillment staff, and backroom space is consumed by packing and staging activities. These trade-offs have contributed to shopper complaints about cluttered stores, uneven inventory availability, and diminished service.
Target’s response has been to tailor fulfillment by market. In Chicago, shifting next-day volume away from high-traffic stores reduced average delivery times by roughly a day and lowered shipping costs to the lowest level of any Target market, according to McCarthy. Store surveys in those locations also showed improvements in cleanliness, team-member availability, and in-stock performance.
In Cleveland, Target opened a 40,000-square-foot sortation center operated by Ryder System. Orders are picked and packed at stores, then routed through the facility, where they are grouped by neighborhood for delivery. Unlike other Target sortation centers, the Cleveland site is dedicated to drivers from Shipt, the delivery platform Target acquired in 2017. Shipt drivers collect orders throughout the day, allowing for more frequent pickups than traditional regional or national carriers.
In markets without sortation centers, Target has begun sorting brown-box deliveries in store backrooms for Shipt drivers to handle locally. The approach shortens delivery routes and reduces reliance on parcel networks, but also increases the importance of precise labor planning inside stores.
Vivek Astvansh, a marketing professor at McGill University, noted that many shoppers now treat next-day delivery as a minimum requirement rather than a premium service. That expectation is forcing retailers to rethink how fulfillment networks are structured and which assets should handle which types of orders.
When Fulfillment Starts Competing With the Store
Target’s decision to redirect next-day volume away from its busiest locations highlights a practical recalibration that many large retailers are quietly confronting. Store-based fulfillment delivers speed, but only up to the point where it begins to degrade execution inside the four walls, inventory accuracy, labor availability, and basic store conditions. Treating store capacity as a constrained input rather than an unlimited advantage forces more disciplined choices about where orders are picked, sorted, and handed off. Over time, that discipline may matter more to delivery performance and customer loyalty than shaving another few hours off transit time.
