Retail has always been about keeping up with what customers want. Today, the real challenge is balancing in-store shopping with the rise of online orders.
Target says it has found a solution—one that could save billions, improve the way customers shop, and help the company grow. The plan combines digital convenience with physical stores in a new way that may change retail.
The Problem
Retailers are losing money as shopping habits change, costs rise, and fewer people shop in person. Some chains close stores to cut losses.
But closing too many can hurt brand presence and make online deliveries slower. Target is trying a different path by rethinking what a store can be.
Why Stores Still Count
Even with online shopping growing fast, physical stores are still important. They let people see products right away, browse in person, and build trust with the brand.
The question now is not whether stores matter, but how they can take on more roles in a digital-first world.
Target’s Answer
Target is building bigger stores that act as both shopping spots and order hubs. Instead of separating physical and online business, one place can serve both needs. This reduces costs, simplifies logistics, and makes it easier to get products to customers quickly.
Larger Spaces
Most Target stores are about 125,000 square feet. The new ones will be much bigger—between 146,000 and 149,000 square feet.
That extra room means more stock, more variety for shoppers, and enough space to handle online orders directly from the store.
Expansion Plan
This fall, Target will open seven new stores in Arizona, Florida, Nebraska, South Carolina, Virginia, California, and Texas.
Six of them are the new large design, while one follows the usual size. Over the next decade, more than 300 new stores are planned.
What “Store-as-Hub” Means
Target calls this approach “store-as-hubs.” Nearly all of its online orders—about 95%—are already shipped from stores.
This cuts out the need for distant warehouses, speeds up delivery, and lowers expenses. Same-day delivery and pickup are easier when stores carry more of the load.
Benefits for Shoppers
For customers, the change means faster service and more choice. Items are more likely to be in stock, orders can be processed locally, and same-day delivery now covers about 80% of U.S. homes. The goal is a smoother mix of shopping online and in person.
Big Growth Target
By 2030, Target hopes this plan will add more than $15 billion in sales. That growth will come from opening new stores, upgrading digital tools, and using social platforms. The company wants all channels, physical, digital, and social, to work together without gaps.
What Leaders Say
CEO Michael Fiddelke has said that Target must balance the fast rise of digital sales with a steady in-store experience.
CFO Jim Lee explained that using stores as hubs is not only faster but also cheaper, since it avoids spending heavily on separate distribution centers.
Why Not Just Warehouses?
Warehouses can move large amounts of stock, but they add extra costs and delays. Shipping from one central place is often slower.
Target’s approach keeps items in stores near customers, making delivery quicker and cutting down on the need for costly new facilities.
Walmart’s Different Idea
Walmart is testing a separate path. Instead of bigger stores, it’s trying “dark stores”—buildings closed to the public that only handle online orders.
It’s a test to see if focusing only on online fulfillment works better than combining digital and physical in the same place.
Competing Memberships
Both companies also run membership programs. Walmart+ and Target Circle 360 offer faster delivery and special deals.
These programs connect directly to how orders are fulfilled, making sure customers get value while encouraging loyalty and repeat purchases.
A Bigger Retail Shift
The debate shows how retail is changing. Online shopping is expected to keep growing fast. U.S. grocery sales online are set to increase more than 12% per year through 2029. Companies that can connect online with physical stores will likely come out ahead.
Sales Trends
Recent numbers show the pressure. In the second quarter of 2025, Target’s total sales dropped nearly 1%. In-store sales fell 3.2%, but digital sales rose 4.3%. This proves the company must lean more on digital to stay competitive.
Why Speed Matters
One of the biggest reasons customers choose a store is speed. Shoppers want curbside pickup, same-day delivery, or two-day shipping.
If a retailer can’t provide it, people switch to someone who can. Target’s hub model is built to meet this demand.
Lower Costs, More Value
Target’s new system isn’t just about speed. By using stores for fulfillment, it saves on transport, warehouses, and double inventory.
The money saved can go into remodeling stores, keeping prices competitive, and adding new products. This could save billions over time.
Possible Challenges
The model still has risks. Larger stores mean higher costs to run. Staff must balance online and in-store demand, which can stretch resources.
If online orders grow too fast, bottlenecks may form. Target will need strong systems to make sure stores can handle the pressure.
Industry Impact
If Target makes this work, other retailers might copy the model. The idea of stores doubling as fulfillment hubs could become the norm.
It may change how people see shopping, where physical and digital blend so smoothly that customers hardly notice the difference.
The Fix in Focus
Target believes it has solved one of retail’s biggest challenges: meeting the rise in online demand without hurting in-store shopping.
By using stores as both shops and hubs, it turns them into more powerful tools for growth. The success of this plan will decide whether it’s the future of retail.