Target might take on Walmart and Amazon with a bold change
The retail superstore is reportedly weighing a key tactical effort to take on its fiercest competitors.
One of the greatest things about shopping at big-box stores nowadays is how fierce the competition is.
This may not sound like something great if you are, say, operating one of these stores. But if you're a customer, you only stand to benefit.
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Retailers like Walmart (WMT) , Amazon (AMZN) and Target (TGT) are constantly trying to outdo one another, undercutting each other's prices and expanding selections.
Take, for example, Walmart's recently revealed plans to build out or renovate hundreds of stores to improve its shopping experience.
"During the next 12 months, we plan to remodel 650 stores across 47 states and Puerto Rico — creating tens of thousands of jobs supporting these projects," Walmart U.S. Chief Executive John Furner said.
The company says the massive undertaking will be part of its "Store of the Future" concept, which will "feature new paint, new signs and more shopping carts, creating a friendly, welcoming atmosphere."
Making stores more navigable and improving selection quality is a big project, but the results almost always help. And perhaps no big-box retailer does this better than Target, which is renowned for its surprising finds.
Target reportedly mulling new perk
While Target (TGT) might be beloved for its treasure trove of quality finds at budget-friendly prices, it's missing one thing its two main competitors, Walmart and Amazon, have: a paid membership. 
It's curious that Target hasn't offered something like this yet. It has a rewards program, called Target Circle, but that isn't a paid membership. It acts more like the kind of loyalty program you might find at a grocery store or a pharmacy, where you get points for shopping and offers of limited-time deals.
But according to a recent report by Bloomberg, Target has been covertly working on a something dubbed "Project Trident," whereby management is developing what might be a paid membership program similar to Amazon Prime or Walmart+.
For a $139 annual fee, the current perks associated with Amazon Prime are:
- Free shipping and returns, often two-day or next-day on eligible items
- Access to Prime Video streaming
- Savings at Whole Foods Market
- Access to the Amazon Prime Rewards Visa Signature Card
- Access to Amazon Fresh grocery stores
- Try Before You Buy shopping
- Amazon Photos storage
For $98 a year, the current perks associated with Walmart+ are:
- Free store delivery
- Free shipping and returns on eligible items
- Fuel savings at Exxon, Mobil, Walmart & Murphy gas stations
- Included Paramount+ streaming subscription
- Limited auto maintenance at Walmart Auto Care Centers
- Cash back on select travel expenses
- Members-only prices during select promotions, like Black Friday
- Mobile shopping in-store
It's not clear exactly what Target would offer to tempt customers to pay up for a membership — or tempt them away from similar established memberships. Perhaps Target would include Shipt, its in-house grocery-delivery service, in such a membership.
It would be a massive undertaking to begin processing ostensibly more shipments and returns, plus a litany of other potential membership benefits. But Target needs a shiny new perk to excite both shoppers and investors again.
Earnings from its holiday quarter are not yet in. Its most recent reported quarter ended in October saw a 4.2% decline in revenue compared with a year earlier. It also saw a 4.9% drop in comparable-store sales.
"This year we've seen more and more consumers delaying their spending until the last moment. Guests who previously bought sweatshirts or denim in August or September are deciding to wait until the weather turns cold before making a purchase," Target's CEO, Brian Cornell, told analysts during the Q3 2023 earnings call in November.
"This is a clear indication of the pressures they're facing as they work to stretch their budgets until the next paycheck."
TheStreet has reached out to Target for comment.
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