Target is involved in the US "next-day delivery" by promoting regional logistics network

According to the Wall Street Journal, the US retail giant Target is building a regional logistics network in the US, distributing goods to smaller warehouses in different regions to provide nearby delivery services for its stores and e-commerce orders. Previously, Walmart and Amazon also took similar measures, and a competition on logistics timeliness is unfolding in the US e-commerce market.

This shift means that retailers will no longer adopt a large warehouse model, that is, shipping from one warehouse to multiple locations across the country, but will instead deploy smaller warehouses in various locations to achieve nearby delivery, thereby shortening the delivery distance and speeding up delivery. In addition, small warehouses can handle packages more efficiently, thus reducing costs and increasing flexibility.

According to Target Chief Financial Officer Michael Fiddelke, the regional logistics layout has helped it effectively reduce inventory levels. In the quarterly financial report ending July 29, its inventory levels fell 17% from the same period last year.

According to reports, Target has recently added facilities called "mobile centers" that use automation to sort and ship items and replenish store inventory in small quantities and multiple times. According to its chief operating officer John Mulligan, Target's mobile centers in Chicago and New Jersey have reduced the transportation time for store replenishment by 20%.

The benefits of this are that not only does it increase delivery speed, it also requires less manpower to unload trailers and allows inventory levels to be kept lower.

For orders generated by e-commerce platforms, the goods will first be packaged in the store and then sent to a small sorting center, which will process them in batches according to the community to which the customer's address belongs, and finally complete the delivery. It is reported that customers close to the sorting center receive their packages an average of one and a half days faster than other customers, and about one-third of e-commerce orders are delivered on the same day.

It is reported that Target currently operates 10 sorting centers in the United States and plans to open at least 5 more sorting centers by the end of 2026 as part of its expansion of next-day delivery services. To achieve this goal, Target has invested $100 million.

Amazon and Walmart are also pushing into regional logistics.

A few months ago, Amazon divided its US logistics network into eight regions, each responsible for delivering packages to local customers. Amazon also opened more "same-day delivery" warehouses to deliver goods with higher time requirements.

Walmart mainly achieves regional distribution through its offline stores. In the first quarter ending July 28, Walmart completed more than half of its e-commerce orders through its stores. Coupled with the increase in warehouse automation, Walmart's US business has reduced out-of-stock situations in the most recent quarter, while reducing inventory by 8%.

Editor✎ Ashley/

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