US Markets
Tuesday, March 5th, 2024 3:14 pm EDT
Key Points
- Target is launching a paid membership program, Target Circle 360, following the lead of competitors Amazon and Walmart.
- Target Circle 360 will offer perks like unlimited free same-day delivery for orders over $35, two free-day shipping, and other benefits, alongside the existing free Target Circle loyalty program.
- The cost of Target Circle 360 has not been disclosed yet, but Target aims to use this new revenue stream to bolster weaker sales, despite beating Wall Street’s expectations in fiscal fourth-quarter earnings and revenue.
Target announced its forthcoming launch of a paid membership program, Target Circle 360, set to debut next month, taking cues from rivals Amazon and Walmart. This subscription service will offer perks such as unlimited free same-day delivery for orders over $35, arriving in as little as one hour with no delivery fees, as well as two free-day shipping. Alongside these benefits, Target will maintain its existing free Target Circle loyalty program, providing customers with special deals and sales throughout the year. While the cost of Target Circle 360 remains undisclosed for now, the retail giant aims to capitalize on this new revenue stream to bolster weaker sales. Although Target’s fiscal fourth-quarter earnings and revenue surpassed Wall Street expectations, the company has experienced three consecutive quarters of declining comparable sales. By introducing this membership program, Target follows the successful models of Amazon Prime and Walmart+, both of which have turned membership fees into significant revenue drivers. Amazon’s Prime program, established in 2005, offers perks like free two-day delivery and streaming services for $139 annually or $14.99 monthly. Walmart+ launched in 2020, providing benefits such as free shipping, free grocery deliveries for orders over $35, and gas discounts for $98 annually or $12.95 monthly. Target’s strategic move aligns with Walmart CEO Doug McMillon’s statement that Walmart+ members spend nearly double the amount of non-members annually. Although Walmart hasn’t disclosed its Walmart+ subscriber count, its CFO noted significant growth in membership, indicating the effectiveness of subscription-based revenue models in driving sales and customer loyalty.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/05/target-launches-paid-membership-target-circle-360.html
