Target’s deteriorating in-store experience risks recovery — retailer bets on a refined fulfillment model to fix it

Customers once pointed to Target as a model for large, immaculately run stores. In recent years, however, rising complaints about messy aisles, longer checkout queues, locked merchandise and recurring stock outages have weighed on the Minneapolis-based retailer and contributed to softer sales.

To address those issues, Target has begun reworking its e-commerce fulfillment approach in a move that may seem counterintuitive: rather than having nearly every store pack and ship online orders, the company is now concentrating ship-to-home activity in a subset of locations. That strategy responds to Target’s longstanding decision to use its stores — rather than large, centralized fulfilment centers — to satisfy most online demand, a practice that has stretched store teams and inventories thin.

As of the end of October, Target had rolled the model out to 36 markets, more than half of the 60 markets where it is testing the change, following a pilot in the Chicago area, Chief Supply Chain and Logistics Officer Gretchen McCarthy said. The company plans to expand the program further in 2026.

The shift marks a departure from the “stores as hubs” strategy Target announced in 2017, which deliberately relied on its nearly 2,000 stores to pick and pack the bulk of online orders rather than build large fulfillment centers like some competitors. That approach helped keep costs and capital expenditure lower, executives say, but it also transformed nearly every store into a logistics node, a development that has complicated store operations.

Target’s digital business has surged since the pandemic, with online sales growing from roughly $6.6 billion in the fiscal year that ended in early 2020 to nearly $21 billion in the fiscal year that ended in early 2025. That growth, however, diverted attention and headcount away from in-store tasks, forcing store managers to balance traditional guest service with an expanding fulfillment workload.

Under the Chicago pilot, Target reduced the number of stores handling ship-to-home orders and concentrated shipping volumes at selected locations. Eighteen Chicago stores stopped packing home-delivery boxes while six increased shipping capacity, and five outlets now account for about 30% of ship-to-home volume in that market. All stores continue to serve customers who pick up orders in-store or via curbside collection.

Target says the reallocation has produced measurable operational benefits. Delivery routes now require fewer stops, easing transportation time and cost. Stores designated for packing can plan staffing more predictably, and customers in the Chicago pilot gained a later cutoff for next-day delivery — 6 p.m. versus the previous noon deadline. Management also reports that stores removed from packing duties saw improvements in on-shelf availability, higher in-store sales and a 10% rise in customer survey scores for store cleanliness and employee interactions. Digital pickup satisfaction metrics improved as well.

Managers in the Chicago area attribute the gains to employees having greater capacity to focus on both the in-store experience and digital pickup, but Target acknowledges that stores still performing picking and packing have not seen the same uplift, a discrepancy the company says it is working to understand.

Despite those operational improvements, Target faces other headwinds that the new fulfillment approach does not solve. Estimated foot traffic has fallen nearly every week since February, according to Placer.ai, reflecting a combination of macro pressures — including higher grocery costs — and company-specific challenges such as weaker merchandise performance and reputational backlash tied to its social stances. Customers continue to complain about locked cases for certain items and persistent checkout delays.

Target declined to disclose how many stores lock specific staples, saying most locations reserve locked displays for high-value items such as electronics. The company has also tried to optimize checkout flow, capping most self-checkout lanes at 10 items or fewer in March 2024, a change it says improved customer throughput.

Independent measurements suggest Target’s edge over big-box rivals on store atmosphere and cleanliness has narrowed. In October 2021, customers rated Target 35 points higher than competitors such as Walmart, Sam’s Club and Costco on atmosphere/cleanliness; by October 2025 that advantage fell to 20 points, according to HundredX, which collects consumer ratings. On availability, Target trailed peers on a six-month trailing average: 43% of Target shoppers gave favorable marks for item availability versus 47% for rival stores. More than 43,000 consumers responded to HundredX surveys over the past year.

Anecdotal customers underscore the gap. Emily Haleck, a frequent Target shopper from Lehi, Utah, said she has cut store visits to a few times a year after noticing messier aisles and disordered apparel displays, and that she now shops more regularly at lower-priced rivals for everyday groceries.

Financial pressure is also a factor: Target is paring its corporate ranks by roughly 8%, a move that has led some analysts to argue the company should invest more heavily in store staffing and operations. Truist retail analyst Scot Ciccarelli said Target risks further share losses if it continues to cut costs rather than allocate more resources to stores and technology improvements.

Target’s incoming chief executive, two-decade company veteran Michael Fiddelke, who will assume the CEO role in February, has made improving the customer experience a top priority. Fiddelke and other executives say their focus is on simplifying fulfillment complexity to free existing store capacity rather than broadly increasing payroll, and they contend internal metrics show on-shelf availability has improved sequentially over the past three quarters.

As the holiday season approaches, Target expects better in-stocks for frequently purchased items than a year ago, executives said, but acknowledged there is more work to do beyond the holidays to restore the consistency shoppers expect.