From Forbes on June 2, 2016:
At the recent Shoptalk commerce event, Jason Goldberger, Target’s Chief Digital Officer and President of Target.com, spoke about his customers’ point of view regarding on-demand delivery, insisting that instead of an immediate gratification shipment, Target guests were more concerned with having their expectations met within an accurate delivery window. That is, if the shopper was informed that their package would arrive on Tuesday, it should be sitting on the doorstep on Tuesday, even if that meant waiting the standard three to five business days for the package to arrive. This sentiment was also reinforced by the retailer’s recent abandonment of its pilot partnership with the Curbside pick-up app to focus on delivery and execution of retail fundamentals. However, recent research collected by Prosper Insights & Analytics suggests that Target guests in particular prefer a more expedited shipping process.
In the age of Amazon.com, and its Prime membership perk of free two-day shipping, three to five days appears to be stretching into a long wait for consumers. With the online powerhouse recently giving shoppers the ability to join Prime on a monthly basis – making the expense a little more palatable for those on tighter budgets – our May survey of more than 7,000 consumers reveals that membership rose 6.5% month-over-month to a current 33.5% of American adults who have access to Prime member benefits, a new high. (Prosper has been tracking this statistic since early 2013.) This figure increases among Target shoppers specifically, where two out of five (39.0%) indicate they have access to Prime. Incidentally, Target guests are 25% more likely to subscribe to Prime than those who shop competitor Walmart.
Furthering Target’s troubles are the number of guests who are considering purchasing a Prime membership over the next year. As of May, one in five (20.4%) Target customers (who aren’t already Prime converts) are thinking about opting into Jeff Bezos’ shopper society, higher than the overall average (15.9%) as well as their Walmart-perusing counterparts (16.6%). Among Target shoppers mulling a Prime membership, the annual $99 subscription is the most popular (56.2%), followed by the monthly $10.99 version (28.6%). Least popular among these guests is the pared down, $8.99/month Prime Video subscription (21.1%), so it appears that Target shoppers are specifically interested in the Prime two-day shipping benefits.
Demographically speaking, it shouldn’t come as a surprise that current Prime members skew a bit younger (read: Gen X and Millennials) and tend toward middle to upper income groups, which is right in Target’s customer wheelhouse. Perhaps at one point, Target guests were okay with three to five day shipping, but with Amazon and other competitors, including Jet.com (which offers free two-day shipping on several common household categories) and Walmart (which is piloting its two-day ShippingPass subscription), wowing shoppers with speedier shipping services, perhaps it’s time for Target to think about exceeding guests’ expectations.