Target grocery pickup service expands nationwide

Target announced today its grocery pickup service is available nationwide, First introduced earlier this summer in the Midwest, Target said it would soon roll out grocery pickup services across the U.S., reaching 1,500 stores in a matter of months. Today, Target says it has reached that goal, which equates to nearly 85% of its locations.

Though the retailer had already offered grocery delivery through Shipt and both online Order Pickup and a same-day curbside service called Drive Up, it hadn't yet offered the ability to pick up groceries due to issues with storing cold foods. But store remodels and more recent expansions to the pickup area inside some Target stores addressed the problem.

To move forward with its plans, the retailer had to work around issues related to the coronavirus outbreak that had delayed Target's plans to fully remodel hundreds of stores. In stores that hadn't yet been remodeled, a small construction project allowed the order pickup area to accommodate temperature-controlled storage.

The new grocery pickup service doesn't offer all of Target's fresh and frozen items at launch. Instead, Target has made available the most popular 750 fresh and frozen items on top of thousands of non-perishables that were already available to order. These newly added items include produce, dairy, bakery, meat and frozen products. The company said it imposed the limitation based on how it saw customers were using grocery pickup services to shop for essentials between larger trips to the store. It's unclear, however, if that will remain true in the coronavirus era, when shoppers are now visiting stores less frequently, but stocking up in greater quantities when they do.

In both Target and Walmart's earnings, announced this week, the retailers reported basket size increases related to this trend. Target, for example, reported customer basket size grew 18.8% in Q2 as people shopped for more items on their Target runs.

If this trend continues beyond the pandemic, retailers may need consider making online order pickup equivalent to shopping inside the store, in terms of product selection.

In addition to fresh and frozen groceries, Target shoppers can also pick from the over 250,000 general merchandise items available for pickup across categories like home, apparel, essentials, and more within their same grocery order. Shoppers don't have to create separate carts" in the Target app, nor does the Target website or app separate grocery shopping from other online shopping the way Walmart.com and its app do.

However, the option to build a Drive Up" order is only available within the mobile app, as before. From the web, you can only create a order you pick up inside the store or choose delivery.

Target is ahead of schedule with its grocery pickup expansions. Originally, the retailer said it would reach 1,500 stores by the U.S. holiday season. The company didn't offer a timeframe for when it expects to offer grocery pickup at every store.

Online grocery helped fuel both Target and Walmart's quarterly sales, both retailers reported this week. In Target's case, same-day services accounted for a majority of its digital growth, with growth of 273% across all services. Curbside pickup grew 734% while Shipt grocery delivery grew 350% during the quarter.