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Target announced today that it is launching a new paid membership program for its customers.
It will look a lot like Amazon and Walmart’s offerings: It will offer free shipping and additional discounts.
Known as Target Circle 360, it will include unlimited free same-day delivery on orders over $35 in just one hour, plus free two-day shipping on cheaper items.
It will launch in April for $49 a year.
That would differentiate it from Costco, where customers have to be members – at a cost of $60 a year – just to shop in stores or online.
Target Circle 360, for $49 a year, will include free, unlimited same-day delivery on orders over $35 in just one hour.
Target already offers a free loyalty program called Target Circle that offers users deals and rewards; It is being renovated to make it easier to use.
The company already offers a free loyalty program to its customers, called Target Circle, where shoppers can access more offers and discounts on their purchases.
This is being re-released to make it easier to use. For example, members will have discounts applied automatically, rather than having to scroll through the app and select them.
The big box retailer is also relaunching its Target RedCard. It will now be the Target Circle Credit Card and will offer an additional 5 percent off purchases at the retailer, free two-day shipping on many items and additional time to return products.
Target is looking at paid membership to make extra money and offset slower sales.
Target is a late entrant to the paid membership market and will have to compete with Amazon’s Prime programs, launched in 2005, Walmart Plus and Kroger’s Boost.
An Amazon Prime membership costs $14.99 per month, or $139 per year in the US, while Walmart Plus offers plans for $12.95 per month, or an annual plan for $98.
It reported a 58 percent rise in fourth-quarter profit to beat Wall Street expectations, thanks to cost-cutting and not holding too much stock during the critical holiday season.
Revenue was up slightly from a year ago and also beat projections.
But comparable sales – those of stores or digital channels that have been in operation for at least 12 months – fell 4.4 percent. The declines appear to be slowing compared to the 4.9 percent drop in the third quarter and the 5.4 percent drop in the second.
The Minneapolis company offered a cautious outlook on sales and profits.
Tight clients because of inflation and high borrowing and credit card costs They are spending less.
Target is more vulnerable than Walmart and other big discounters. More than half of its annual sales come from so-called discretionary items such as toys, fashion and electronics that many Americans have stopped buying.
Target has been trying to strike the right balance between offering value for money while infusing stores with trendy products.
Last month, the retailer launched a new collection called Dealworthy, featuring nearly 400 everyday essentials starting under $1, with most items priced under $10. They include clothing and accessories, home goods and electronics.