Will Target's Rebalancing Act Solve its 'Sloppier' Stores Problem?

In a recent news report delivered by Melissa Repko for CNBC, it was made clear that Target -- as COO and soon-to-be CEO Michael Fiddelke gears up for the next phase in the company's ongoing turnaround campaign -- is looking to improve upon its existing image problem.

"Customers used to hold up Target as an example of how to run large, yet sparkling stores," Repko wrote.

"Yet in recent years, shopper complaints about sloppier aisles, longer checkout lines, locked-up merchandise and out-of-stock items have dogged the Minneapolis-based retailer, contributing to sagging sales," she added, before pivoting to detail the red-and-white brand's latest move.

In a rebalancing act that promises a pivot in its existing online strategy, Target will now designate just some of its stores as fulfillment locations for online orders -- meaning that frontline store staff are also charged with picking and packing boxes to ship directly to customer doors -- rather than expecting this additional workload from associates in all of its physical locations.

"The company has expanded that plan to 36 markets as of the end of October, more than half of its 60 markets, after a successful pilot in the Chicago area, said Gretchen McCarthy, chief supply chain and logistics officer. It plans to expand that further in 2026," Repko stated.

Target Seeks To Remove Complexity, Improve In-Store Experience With New Fulfillment Plan

With Fiddelke, in October, having indicated that Target's "stores as hubs" model had the dual impacts of making the e-comm side of business more cost efficient and light on capital, it also presented challenges as store staff were tasked with far more duties than they had been previously.

“If you’re a store manager now, yes, you’re supporting your in-store guest and you’re also running a fulfillment business that’s gotten pretty big. And I think we’re just now fully appreciating, ‘All right, we’ve got to make sure that we’re doing both really well and it’s more complex than it used to be,'" Fiddelke told CNBC last month, adding that the question of how to trim back some of that complexity was the impetus behind this ongoing move.

The Chicago market served as the test run for the rebalancing, with the 100 stores in the greater Chicago area no longer all being tasked with online order fulfillment -- 18 stores stopped these operations entirely, while six increased their workloads. Just five stores, alone, in that region now handle 30% of all ship-to-home volume in the market.

“The store is still very much the hub of everything that we do,” Gretchen McCarthy, chief supply chain and logistics officer, said. “We’re just getting more precise and maybe a little bit more refined in how we’re using all of those stores and our supply chain network.”

The early results have been promising: In stores that no longer engage in picking and packing for online orders, in-store sales have ticked upward, out-of-stocks have shown improvement, and customer surveys reflecting opinions on store cleanliness and the quality of staff interaction improved by 10%. There's one caveat, however, as McCarthy underscored -- these sunny metrics weren't showing the same level of improvement in locations where frontline staff were still charged with fulfillment tasking.

For his part, despite some analysts' calls for additional payroll to beef up frontline rosters, Fiddelke seemingly remains focused on improvements to efficiency rather than increased hiring, per CNBC, although the incoming CEO noted that Target was "always looking at what’s the right level of staffing in our store."