A customer shops for holiday gifts in a Target store on December 21, 2023 in Austin, Texas.
Brandon Bell | Getty Images
Target on Tuesday said it can 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, together with other perks.
The paid membership tier will launch in early April and initially cost $49 per 12 months, said Cara Sylvester, Target’s chief guest experience officer, who announced this system at an investor event on Tuesday in Latest York City. It would cost $99 per 12 months after the corporate’s promotional period, which ends May 18. Customers who’ve a Target Circle bank card will have the opportunity to pay the lower cost of $49 per 12 months beyond that.
The retailer can even relaunch its free Target Circle loyalty program, which debuted in 2019, to make it easier to make use of and more personalized. For instance, members who belong to the free program can have discounts robotically applied reasonably than having to scan through deals on the app, she said.
Target also will rebrand its bank card program. The Circle card will include an additional 5% off customers’ purchases, free two-day shipping on many items and prolonged time to make returns. The cardboard was previously referred to as Target RedCard.
The large-box retailer is popping to the brand new revenue stream because it tries to spice up 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 can also be following within the footsteps of outlets which have turned membership fees right into a money maker and a sales driver. It’s unclear how many individuals could enroll for the paid tier. The free Target Circle has greater than 100 million members, in line with the corporate.
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 12 months or $14.99 monthly, with the video membership-only option of $8.99 monthly.
Amazon doesn’t often share Prime membership totals. The corporate had greater than 200 million members of Prime across the globe in early 2021, in line with a final letter to shareholders written by former CEO Jeff Bezos.
Walmart launched its program, called Walmart+, in 2020. It costs $98 per 12 months or $12.95 monthly, with perks like free shipping, free grocery deliveries for orders of a minimum of $35 and gas discounts.
Target is popping to its competitors’ playbook for a reason: Walmart CEO Doug McMillon told investors on the corporate’s earnings call in February that Walmart+ members spend nearly twice as much as non-members and buy more over the course of a 12 months.
Walmart has not said how many individuals subscribe to Walmart+, but its CFO John David Rainey said on the earnings call that its membership continues to grow by double-digit percentages.