Target Takes Its Subscription Service to the Next Level

Source: Thinkstock

Source: Thinkstock

Target (NYSE:TGT) is expanding its online subscription service in an effort to combat increasing competition from rivals like Amazon.com (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT). ABC News reported last week that after making 150 baby care products available in September for subscription, Target recently expanded that program to cover nearly 1,600 items across a wider spectrum of products. Its subscription service is free and allows people to schedule shipments in four, six, eight, 10, and 12-week installments.

Amazon’s own program, Subscribe and Save, is one of the most popular subscription services, and it initially won over customers with the program that can restock their shelves for them before they even notice what’s gone missing. Delivering toilet paper, paper towels, and razors at prescheduled times have allowed customers to always stay stocked, and many have even enjoyed the benefits of Prime that allows them to get their items at no shipping cost, and always within two days.

Amazon has realized significant success with its Subscribe and Save program, and that’s why Target is now trying to also get in on the gains. According to ABC News, Jason Goldberger, senior vice president of Target.com, says that Target’s subscription expansion is driven by very strong demand, and even though the service only began six months ago, the baby care items that were part of the rollout now account for 15 percent of online sales for that specific category.

In addition, subscribers to Target’s new service also get a few perks of their own, because as highlighted by ABC News, the Minneapolis, Minnesota-based company recently added a five percent discount on items ordered through the program, and those customers using a Target branded card get another five percent discount. Target is hoping that these incentives will convince shoppers that they should subscribe at Target, rather than at Wal-Mart or Sears (NASDAQ:SHLD), because both retailers have already been offering subscription services for a few years now, and Target is late to the game.

Now, Target is also working on bolstering its online offerings and making sure that those shoppers who wish to shop online can do so with ease. More and more customers are now proving an interest in making their purchases via their tablets, smartphones, or computers, and it is necessary that the traditional brick-and-mortar retailers have the infrastructure to support this demand. Target recognizes the need to keep its online store up to snuff, and thus far has worked on doubling the number of products that can be ordered online to 60,000.

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