A dramatic increase in mobile traffic is driving the retail giant to restructure and focus on its online customers.
Thousands of Target jobs are on the chopping block. It’s part of a company-restructuring plan that has the retail giant taking the money saved on jobs and reinvesting it into more than $1 billion in technology improvements aimed at boosting mobile sales.
According to Internet Retailer, the majority of the job cuts will be focused at company headquarters, not in stores.
IR said Target’s mobile conversion rates skyrocketed 69 percent from 2013 to 2014, while mobile traffic increased by 44 percent.
In a recent conference call with analysts, Target’s chief strategy officer Casey Carl said the company’s restructuring – cutting jobs and investing in technology – is an effort to evolve with consumers’ changing shopping preferences.
“Almost everything begins on mobile,” he says. “98 percent of Target guests shop digitally and the vast majority of that shopping comes using a mobile device.”
Target will use the job-cutting savings to redesign its website and continue to develop and customize its Cartwheel shopping app, WCCO reports. David Brennan, a marketing professor at the University of St. Thomas, said Target has some catching up to do in the digital shopping world.
“Amazon, obviously, is first. Wal-Mart is right up there,” he said. “Target is really lacking or lagging in this particular area.”
According to IR, Target’s Cartwheel app has been downloaded more than 13 million times. It’s also driven more than $1 billion in revenue since it launched in May 2013.
IR said Target also plans to conduct a pilot program using Apple’s iBeacon technology to send coupons and mobile offers to customers while they’re shopping in store.
“Target’s data shows that digital helps drive and does not detract from in-store sales while it also builds brand loyalty,” IR said.
Target also recently cut its threshold for free shipping in half, from $50 to $25. The retail giant now has one of the lowest free-shipping levels among retailers, even beating Walmart.com ($50) and Amazon ($35).
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