June 23, 2014
A Bullseye View “Perspectives” is a forum for Target’s top executives to share their point of view on everything from industry trends to best business practices. In the story below, Jason Goldberger, Senior Vice President, Target.com and Mobile discusses Target’s new shipping policy.
In today’s constantly changing technology landscape, sometimes it’s easy to overlook the small things. But it’s the seemingly little things that often make shopping easier, guests happier and ultimately, our business stronger.
That’s why I’m excited that Target has simplified our free shipping offer: Spend $50 on Target.com and we’ll ship your purchase for free. And while we’re not the first retailer to provide free shipping, we think our new offer is among the most compelling in the industry in terms of value and breadth. (And unlike some other online retailers, we don’t exclude a large percentage of our assortment – only a small number of heavy or oversized items like sofas.)
So why are we making this change now? We’ve made meaningful improvements to the performance of Target.com for the last several months. But the reality is, our guests continued to tell us that our shipping policy was frustrating and confusing to them, and holding us back. In fact, our internal research told us that more than half of Target.com shoppers who abandoned their shopping carts said their decision was related to shipping costs.
And having spent most of my career in e-commerce, I can tell you that customers hate to pay for shipping. That’s why I firmly believe our new free shipping offer will result in fewer abandoned carts, more sales and more loyal guests.
Removing the shipping barrier will also enable our guests to focus on the many other improvements we’ve made to Target.com, and Target’s larger “omnichannel” efforts. We’ve rolled out new offerings like Store Pickup and Cartwheel, our hugely successful digital savings app. We’ve also become a much stronger player in e-commerce, particularly in mobile – which more and more is becoming Target’s front door.
And it’s great to see that others are taking note of our progress. We were thrilled to be named 2013 Mobile Retailer of the Year by Mobile Commerce Daily. But that’s not all; Target also had two of the top seven most downloaded mobile-commerce apps (Cartwheel and the flagship Target app) in the first quarter of 2014, according to the App Annie and Internet Retailer Index.
We are also seeing the impact of our efforts on our business. One key gauge of online retailers’ success is the so-called conversion rate, which is the percentage of a website’s visitors who “convert” into buyers and make a purchase. Target’s conversion rates have climbed markedly this year, we’re up 42% on mobile and 36% on desktop year-to-date.
Our progress can largely be attributed to doing simple things that are great for guests: expanding our assortment, becoming even more price competitive, adding Store Pickup and improving the overall site experience – from the way we organize and display products to enhanced search and analytics. And now, we are adding a simple and compelling free-ship policy.
I joined Target as head of the Target.com and Mobile team about a year and a half ago. When I received that first call about the job, I remember thinking how cool it would be to work at Target, a known retail leader, as the entire industry undergoes a significant revolution. So I jumped at the opportunity.
Since then, we’ve doubled down on digital, including bringing in an entirely new leadership team – recruiting some of the best e-commerce talent in the world in site merchandising, mobile and data science. We’re still actively hiring and we’ve got big, cutting-edge work underway.
However, what’s most exciting about retail is that nobody knows exactly what it’s going to look like 10 years from now (or even one year from now). But I believe it’s going to be very different than it is today. And I’m excited to be at the forefront of the changes happening in retail as the future takes shape. Stay tuned!
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