Target Launches Paid Membership Program Target Circle 360 to Rival Amazon and Walmart

Target Launches Paid Membership Program Target Circle 360 to Rival Amazon and Walmart
Image credit: Target Cooperation Website 

During Target’s investor event on Tuesday last week, the company announced the launch of a paid membership program, Target Circle 360, set for April 7. This program aims to compete with Amazon and Walmart by offering unlimited free same-day delivery for orders over $35, free two-day shipping, and additional perks like exclusive partnerships and product offerings. The same-day delivery service will be provided by Shipt, which Target acquired in 2017.

Target Circle 360 is a paid extension of the existing free loyalty program, Target Circle, which has been in place since 2019. The revamped program will offer more personalized benefits, including automatic discounts and personalized deals. Additionally, Target is rebranding its RedCard credit and debit cards under the Target Circle name, which will now provide an extra 5% discount on purchases.

The new subscription will initially be offered at a promotional rate of $49 per year until May 18, after which it will cost $99 annually. However, Target Circle credit card holders will continue to pay $49.

This move comes as Target tries to counter declining sales, which have fallen for three consecutive quarters. Despite exceeding Wall Street’s expectations in the fourth quarter, Target's comparable sales dropped by 4.4%. The company also anticipates a 3% to 5% decline in comparable sales for the first quarter of 2024, with total revenue reported at $31.9 billion.

In contrast, Amazon and Walmart have seen significant success with their paid memberships. Amazon, which launched its $139 Prime membership in 2005, now boasts over 200 million members and reported $170 billion in revenue for Q4. Walmart’s membership program, Walmart+, launched in 2020 for $98/year, has also been successful, with members spending nearly twice as much as non-members.

Target CEO Brian Cornell emphasized the company's commitment to innovation and growth, stating that the new Target Circle membership program is part of a broader strategy to reignite sales, increase traffic, and gain market share, positioning Target for profitable growth in the future.