US-ECONOMY-SHOPPING
Photograph by Paul J. Richards—AFP/Getty Images

Target CEO Says Online Sales Are Actually Helping Stores on Black Friday

Nov 25, 2016

It took them a while, but it looks like retailers have finally figured out that online sales don't necessarily eat into their store sales. On the contrary.

At a packed Target (tgt) store in Jersey City, N.J. on Thanksgiving, people were jumping on Black Friday deals, many of which have also been available online. The discount retailer in fact got a head start, launching its deals at the stroke of midnight ahead of stores opening at 6 p.m.

Since the last holiday season, Target has significantly invested in improving its website; equipped hundreds more stores to be able to ship online orders so that now, 1,000 of them can help it speed up e-commerce; improved the in-store pickup area for e-commerce orders; and given shoppers a narrower time window for when an order is ready to be retrieved.

As he gave Fortune a tour of the store, Target CEO Brian Cornell said that the retailer was simply responding to customer expectations in an age where they don't want hassles in shopping in the way of their choosing.

"We have to make it really easy for the customer," Cornell said. Of the brick-and-mortar stores-digital dichotomy, he added, "They can't compete with each other. Those days are going to fade away."

The option to order online means that shoppers are more relaxed that they won't miss out on a specific item, and will browse longer, generating sales, as the logic goes. What's more, coming into the store gives Target another opportunity to sell. Cornell said there have been more of those extra impulse purchases made by shoppers coming to pick something up so far this shopping weekend.

Online sales were up by a double-digit percentage on Thanksgiving so far, he said. And the day is on pace to rank as one of the company's top online sales days ever.

Though Target is still offering some in-store-only deals, those are becoming rarer. Indeed, this week, the company said that it would offer all Cyber Monday deals in its stores too, not just on its website, in a move applauded by Wall Street.

"Brick-and-mortar retail has to be agnostic about online vs. store sales," Moody's retail analyst Charlie O'Shea told Fortune. "They're really getting it now."

Target this month reported that online sales rose 26% last quarter, an improvement over the preceding quarter.

Cornell said that online traffic had been steady on Thanksgiving so far. But Target gets some 94% of sales in stores, so his strategy is to have both avenues feed each other.

"We love the digital experience we're creating," Cornell said. "But we win when they come into a physical store."

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