Target Relaunches Its Subscription Program As An Effort To Compete With Amazon Prime

Target is set to introduce an unlimited rush shipping subscription service to compete with Amazon Prime.

The company is revamping the program to offer a new paid membership, automatic discounts, and tailored deals. Moreover, Target is renaming its RedCard credit and debit cards to Target Circle, giving customers an extra 5% discount on purchases.

Target Circle 360,the paid upgrade of Target’s free loyalty program, is launching with an offer for new members for $49 per year from April 7 through May 18.

“We’ll continue to invest in the strengths and differentiators that have delivered strong financial performance over time,” Target CEO Brian Cornell. “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.”

Target Circle 360 mostly combines existing benefits like free shipping and same-day delivery (already available through Shipt or free shipping on orders over $35). The new plan adds access to delivery from other stores through the Shipt Marketplace. So, for frequent Target shoppers who already use Shipt, the new program may not be a big change.

The emergence of the new plan coincides with the increasing integration of online and traditional retail. Despite surpassing Wall Street’s expectations in the fourth quarter, Target experienced a decline in total sales over three consecutive quarters, with a 4.4% decrease in comparable sales. It anticipates a further decline of 3% to 5% in the first quarter of 2024, with total revenue projected to be $31.9 billion.

In contrast, Amazon reported a fourth-quarter revenue of $170 billion, an increase from $149.2 billion the previous year. Amazon’s membership, priced at $139 and launched in 2005, now boasts over 200 million members. Similarly, Walmart’s paid membership, Walmart+, introduced in 2020 at $98 per year, has been successful. CEO Doug McMillon stated in February that Walmart+ members spend nearly twice as much as non-members throughout the year.