How Target stores are functioning as mini distribution centers

Retailers like Target are increasingly transforming into small distribution centers, shipping items to customers' homes and serving as a pick up location for online orders, reports the Chicago Tribune.

These retailers must straddle the line between retail and e-commerce, deciding how to divvy up stock between in-store and online shoppers.

Target often shuts down online sales from specific store locations when inventory dips to prevent customers who do travel to the store from leaving empty-handed and disappointed.

Target will often shut down online sales for some items when a specific store's inventory falls below of certain threshold, said Target spokesman Eddie Baeb. By depriving online shoppers of the order pickup or ship-from-store options, Target keeps shelves full in its stores and ensures in-store customers do not leave disappointed or empty-handed.

"When a customer comes to the store, there's an expectation they're carrying items home in a basket, not getting them shipped. We're really trying to fill that need," said Mr. Baeb, according to the Tribune.

This system also acts as a buffer in case Target's inventory systems aren't updating and reduces the chances the retailer will accidentally sell the same product to two different customers, according to the report.

More articles on supply chain:

Opinion: 4 reasons drug prices will continue to rise in 2017
Supply chain tip of the week: How to put your supply chain on a 'diet'
Survey: 19M Americans have purchased cheaper drugs across US borders

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