Target (TGT) has made some unpopular changes in the past, and it appears another one is on its way.
The giant Minneapolis retailer experienced a supply and demand problem in the first and second quarters of 2022. The company had cited that it was heavy on inventory that it wasn’t able to move.
Target’s women’s fashion inventory hit a snag, when the retail giant thought that its customers would want to wear long sleeve, frilly, flower print dresses. The Target women’s fashion trends did not get accepted by customers and the products just sat. Some inventory was so hard to get rid of, that if a customer did buy it and then wanted to return it, Target would offer to let the customer keep the product and still get a refund as well. The retailer was spending so much money restocking and trying to resell the inventory that it became more cost effective to let customers keep the unwanted goods.
Target also seems to be pushing the self-checkout kiosks in its stores by making the check outs with cashiers less available. This strategy has also been noticed at Walmart (WMT) stores as well.
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Target Cutting Corners or Forcing Change
Just when consumers are already feeling nickeled and dimed to death at every retailer, Target is going to start charging for its plastic bags. Yes, customers who are paying their hard-earned money at the retailer, will now have to pay to use bags to carry their purchases out of the store. This change is set up to go in effect only where local and state mandates require it. Currently, 10 states ban single-use platic bags and require fees for reusable bags.
Whether this change is to work towards a greener commitment or it's a way to save a buck, customers are expected to start seeing the bag fee on their receipts.
The Target bag fee will automatically be billed on delivery and pickup orders. The initial charge will be set at $1 for ten bags. After the order is complete, the price will be adjusted for the accurate number of bags used. If a customer has a pickup order and they decline the plastic bags, a credit will be issued for the bag fee, however that will not be an immediate refund, it will take time for the refund to process. Delivery orders will not have the option to decline the bags used in the delivery of the order. There currently is not an option on the Target app to decline a bag at the time purchase.
When a customer goes into the store to do the shopping themselves, the bag fee is not always required for in-store purchases, so a quick run into Target might not be assessed the bag fee. It's only a matter of time before customers will start being asked if they want to tip on Target orders, not only at delivery, pickup, cashier, but of course at the self-checkout as well. Customers who want to avoid the bag fee, shop inside, and to be green bring those reusable bags too.
Target Convenience Fee
Target is making questionable choices by charging for bags, but it also is still working on delivering a better customer experience. The drive-up option to pick up orders began accepting returns as well. This service comes at no extra cost, which is odd, because some customers would be more than willing to pay $1 to avoid parking, going inside, standing in line, to return an unwanted product. However, those same customers are going to be miffed at paying $1 for bags to carry their groceries and other orders.
Target is again offering a free service to its customers, who would likely be ok with paying for it, the Starbucks (SBUX) delivery. When placing a Target pick up order, customers can have their Starbucks order delivered alongside the Target order curbside delivery. It's a service that Target is offering for free that some Target customers would probably be more than happy to pay $1 for the convivence of getting their curbside cup of joe delivered with their groceries.
