Target plans to invest $100 million into e-commerce hubs

It's time for a triple play. Three stocks that we're watching in the final 30 minutes of trading. We've got Target, Warner Brothers Discovery and Wingstop. Kicking off with Target, the big box retailer saying that it is investing more in its e-commerce business to speed up delivery time. So the retail giant spending $100 million to build a larger network of supply chain hubs. They're calling them sortation centers here after testing the concept in a couple of cities. Now it currently has nine of these centers with plans to open more and also create hundreds of jobs over the next several years.

Now the centers could potentially help a target boost its online sales, which have slowed in recent quarters by ensuring faster delivery for its customers. E-commerce sales increased by less than 1% in its third quarter. That's the most recent results. We're getting earnings from Target next week, but that's actually down from 29% growth at the prior year. Alley, the competition is very stiff. In the retail sector overall, obviously among the big box retailers, they're going up in many situations against Walmart, against Amazon, which you could, I think, make a pretty strong argument that they have much shorter delivery times. Right.

And at the end of the day, what do consumers want? They want to get their delivery as fast as possible and they don't want to pay high delivery fees. So that seems to be what this sortation center project is going to focus on. I mean, let's admit it. Not as a behemoth in this space, so why not try and beat them at their own game? Of course, Target has been going through a bit of a rough patch. They cut their outlook for the holiday quarter. They said they're looking to slash $3 billion worth of costs over the next three years. We'll see what those earnings results, what story that tells next week.

But I think what's interesting is I've noticed on TikTok and social media, people at branded Target as this luxury experience. You go in, you take your Starbucks. You do, too. Yes. I like social media. I go to Target, it's nice. That's what people say.

You go in for one thing, you leave with 50 and I wonder if there's. Oh, that I know, but the luxurious part of that is. Oh, yeah. If you see TikTok. If you talk and things and I think some of its competitors, I would definitely. Tarjay. Tarjay.

I mean, come on. So I wonder if there's a play there for Target moving forward, maybe partnering some TikTok or social media influencers. Oh, you know, I don't spend a lot of time on TikTok. I could be the CMO. I don't think you can learn. I think it's in e-commerce sales, we learned a lot with Walmart. They were a 12% increase there at Walmart, far exceeding Sam Store sales.

Sam's Club up 21% on e-commerce. And something Sean and I talked about earlier, Ali, which is surprising, is you talk about their competitors. Walmart and Amazon, well, they do subscription services and Target has stayed out of that. Well they did have one. It started in 2014 and they canceled it in 2020. That's the game that you can't help but wonder if they want a mulligan there and to get back in. That's where everyone's going is to a subscription service with free shop, free shipping and some deals.

And then you also get that reoccurring revenue with so much easier for shoppers. And given that tough competitive landscape, you would think, I think Target should definitely do that. That would be my next one. Seems to be limited downside in that game. Now potential value play there potentially too.

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