Target Says Sortation Centers Have Boosted Next-Day Deliveries 150%

As Target continues its rollout of sortation centers, the retailer is learning that these facilities allow it to serve more customers, faster.

The sortation centers are designed to save time and space for store teams by removing the sorting and packing process from store backrooms. They’re also meant to reduce processing time for delivery partners by presorting and arranging packages for easy pickup, Target said in a Friday (Sept. 1) fact sheet.

The firm opened a pilot sortation center in 2020 and announced in February that it plans to invest $100 million to build a total of 15 such facilities by the end of 2026. Target currently has 10 sortation centers open in seven states, having opened its latest one in Miami, Florida, in August.

“Since the start of our sortation center operations, these facilities have helped to increase the number of orders delivered to guests the next day by more than 150%,” Target said in the Friday fact sheet.

Each sortation center retrieves packages from 30 to 40 local stores, depending on the market, and then sorts, batches and routes them for delivery to customers, according to the fact sheet.

In June, the retailer opened its first Target Last Mile Delivery extension facility, which receives pre-sorted packages from a sortation center and prepares them for delivery to additional neighborhoods, the fact sheet said. This facility can be built at a fraction of the cost of a sortation center and extends the company’s next-day delivery capabilities to more customers.

Target is testing the use of larger-capacity vehicles to deliver orders in two sortation center markets, per the fact sheet. It plans to expand this to all markets in the next few years.

Sortation centers are expected to double their delivery volume this year and deliver a growing number of these items to customers the next day.

“Sortation centers are an important piece of the strategy here at Target, and we’re excited to continue testing and learning along the way,” the company said in the fact sheet.

Target reported during an Aug. 16 earnings call that it has been improving its logistics in both global shipping and regional distribution centers. The company has also accelerated its processing of returns.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.