Target Plots a Course for Sortation Center Growth

As it ramps up its delivery order speed and efficiency, Target Corp. is sharing the “secret sauce” behind its sortation center success. Not only do the retailer’s facilities allow it to serve more guests faster, but they also offer time and space savings for its entire team – and the strategy is only growing.

According to Target, associates retrieve packages daily from a range of 30 to 40 local stores in markets that currently have a sortation center, and bring them to the facility to sort, batch and route for delivery to local customers through a third-party carrier or Shipt delivery route. The facilities thereby help lower costs and create efficiencies while increasing speed of delivery for customers.

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“By removing the sorting and packing process from our store backrooms, we save valuable time and space for our store teams to fulfill additional orders and serve guests,” Target explained. “And because our sortation center technology presorts and arranges packages for easy pickup, it reduces processing time for our delivery partners.”

Target currently operates nine sortation centers in Minnesota, Texas, Colorado, Illinois, Georgia and Pennsylvania, and recently opened new sortation centers in the Chicago and Denver markets. Each of these centers employs low-cost Target Last Mile Delivery, which provides collaboration with partners at Shipt, as well as drivers on the Shipt platform, to deliver batches of orders that have been sorted hyper locally, 40% of which are delivered next day.

Through a $100 million planned investment, Target will further ramp up its next-day delivery capabilities as it works to reach more than 15 facilities by the end of 2026. Target is also currently testing larger capacity delivery vehicles in two of its sortation center markets, with plans to expand to all markets in the next few years.

“As we grow our network, we anticipate creating hundreds of additional jobs in local metro areas with market-leading wages,” the retailer concluded. “Sortation centers are an important piece of the strategy here at Target, and we’re excited to continue testing and learning along the way.”

Minneapolis-based Target Corp. is No. 6 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America, with nearly 2,000 locations.