Report: Target Weighs Paid Membership Program
Target is considering offering customers a paid membership program similar to Walmart+ or Amazon Prime, Bloomberg reported Wednesday. The news outlet said the potential membership program would be called Project Trident and could launch as soon as this year, according to people familiar with the matter. Target shares rose 2.4 percent Wednesday following the publication of Bloomberg's article.
Total Retail's Take: Target already has a free loyalty program for customers, Target Circle, which offers perks such as 1 percent earnings, exclusive deals and a birthday gift. The new paid program, according to Bloomberg, would go beyond that to offer additional benefits. It could incorporate Shipt, the grocery delivery business Target bought in 2017, according to Bloomberg's sources.
The possible move into premium loyalty comes as Target has faced declines in sales and store closures in recent months. It reported its first quarterly sales drop in six years in August, with CEO Brian Cornell blaming higher prices for food and household essentials, as well as customers pulling back on goods to spend more on experiences or travel, Fortune reported.
Target's primary competitors, Walmart and Amazon.com, currently have the lion's share of the paid membership model. The benefits of which include steady recurring revenue from membership fees as well as a higher customer lifetime value for premium loyalty members vs, nonmembers. It would be surprising if Target doesn't get into the premium loyalty space.