On the expectations that online sales will grow 40 percent in 2015, Target recently announced that it will be cutting $2 billion worth of jobs in order to cut costs and invest in e-commerce.
Target is currently the second-largest retailer in the US (behind Walmart) and has already heavily invested in the e-commerce side of its business. In 2014, they said they had rewritten 75 percent of its e-commerce platform, which is already a huge investment in resources.
All of this is in line with the strategy of Target’s new head of digital and omnichannel strategy, Mike McNamara, formerly CIO at British supermarket giant Tesco. Target’s leadership is focused on the internet being the new engine of growth for Target and retail in general, a major shift from the strategies of the brick-and-mortar past.
“I have long admired Target as a retailer and its legacy of putting customers first,” McNamara said. “To be part of an organization like Target and help shape the future of its technology and omnichannel strategy was a dream opportunity for me.”
When such a giant of an industry makes a shift of dollars like this, everyone tends to notice. Huge investment of capital away from brick-and-mortar towards digital means that the internet is seen as the definite future of retail shopping. Beyond that, the clear importance of a reliable and functional e-commerce platform and a focus on omnichannel sends a more specific message about the digital future of retail.
“We’re focused on our future and building the capabilities that will take us further, faster,” said Target CEO Brian Cornell. “Redefining Target will require a renewed emphasis on prioritization and innovation, and above all else, putting our guests first in everything we do.”
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