THE SUPPLY CHAIN INTERVIEW
Chicago: The proving ground Before rolling out its refined strategy nationally, Target conducted an intensive pilot in Chicago, beginning in May. The market offered ideal conditions for stress-testing the approach: high customer density, dozens of stores, two fulfilment centres and two sortation centres.
The operational changes were substantial. Target concentrated a higher percentage of shipping volume into six stores, removed shipping capabilities from 18 stores entirely and increased the volume processed through fulfilment centres. The transformation was rolled out in weeks – a remarkable feat given the complexity.
The results validated Gretchen’ s thesis. Chicago became almost a full day faster with shipping and could offer next-day delivery on five times more local shipping demand. Promise speed improvements drove immediate incremental sales gains in categories like baby products and household cleaning.
Perhaps most impressively, local fulfilment cost per unit dropped significantly, making Chicago one of Target’ s least expensive shipping markets across the entire network.
“ That increase of promise speed is leading to incremental sales gains, which we saw almost immediately in certain categories like baby and household cleaning,” says Gretchen.
“ Local fulfilment cost per unit is also significantly lower than before the test and Chicago has become one of our least expensive shipping markets across
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