Target on Tuesday said it will launch a paid membership program next month, riffing off the playbook of its rivals Amazon and Walmart.
The subscription tier, Target Circle 360, will include unlimited free same-day delivery for orders over $35 in as little as one hour with no delivery fees and two free-day shipping, along with other perks. The retailer will continue to offer its free Target Circle loyalty program that offers special deals and sales throughout the year.
Target did not immediately say how much it would cost.
The big-box retailer is turning to the new revenue stream as it tries to boost weaker sales. Its fiscal fourth-quarter earnings and revenue reported Tuesday beat Wall Street’s expectations, but its comparable sales have declined three quarters in a row.
With the move, Target is also following in the footsteps of retailers that have turned membership fees into a money maker and a sales driver. Amazon launched its Prime program in 2005, with perks like free two-day delivery and streaming of popular movies and original TV shows. It costs $139 per year or $14.99 per month, with the video membership-only option of $8.99 per month.
Walmart launched its program, called Walmart+, in 2020. It costs $98 per year or $12.95 per month, with perks like free shipping, free grocery deliveries for orders of at least $35 and gas discounts.
Target is turning to its competitors’ playbook for a reason: Walmart CEO Doug McMillon told investors on the company’s earnings call in February that Walmart+ members spend nearly twice as much as non-members and buy more over the course of a year.
Walmart has not said how many people subscribe to Walmart+, but its CFO John David Rainey said on the earnings call that its membership continues to grow by double-digit percentages.
Source: https://www.cnbc.com/2024/03/05/target-launches-paid-membership-target-circle-360.html
