Target to launch its own version of Amazon Prime, starting at $49/year

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During Target’s investor event on Tuesday, the retail giant announced it is launching a paid membership program, Target Circle 360, on April 7 to compete with rivals Amazon and Walmart. The subscription tier includes unlimited free same-day delivery for orders over $35 and two free-day shipping, along with other perks like exclusive partnerships and product offerings. The same-day delivery is provided by Target’s delivery service Shipt, which the company acquired in 2017.

Target Circle 360 acts as the paid version of its free loyalty program Target Circle, which has existed since 2019. The company is relaunching the program to make it more personalized for members, such as automatic discounts and personalized deals. Additionally, it’s renaming Target RedCard credit and debit cards to Target Circle, which will now give customers an extra 5% off purchases.

In terms of pricing for the new subscription, Target is offering a promotional rate of $49 a year until May 18. It’ll then cost $99 per year. However, if you have a Target Circle credit card, it will still cost $49.

Target is rolling out a paid membership way later than its competitors, and the move comes as it continues to see a decline in sales (which have dropped for three quarters in a row). The company is copying from Amazon and Walmart’s playbook to hopefully bring in additional revenue and boost sales. Despite Target’s fourth-quarter earnings results beating Wall Street’s expectations, the company’s total comparable sales declined 4.4%. Plus, Target anticipates weaker sales for the first quarter of 2024 as it expects a decrease of 3 to 5% in comparable sales. Total revenue was $31.9 billion.

Meanwhile, Amazon reported its Q4 results last month, touting $170 billion in revenue compared with $149.2 billion in the same period a year prior. The company credits the revenue jump to a “record-breaking” holiday shopping season and its October Prime Day event. Amazon launched its $139 membership in 2005, and it now has more than 200 million members.

Walmart also sees success from its paid membership, Walmart+, which debuted in 2020 for $98/year. Walmart CEO Doug McMillon told investors in February that Walmart+ members spend nearly twice as much as non-members and buy more through the year.

“Looking ahead, we’ll continue to invest in the strengths and differentiators that have delivered strong financial performance over time,” Target CEO Brian Cornell wrote in Target’s letter to investors on Tuesday. “We’ll also roll out fresh innovations, including our new Target Circle membership program, as part of our roadmap for growth aimed at meeting consumers where they are, reigniting sales, traffic and market share gains, and positioning Target for profitable growth in 2024 and beyond.”

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