Online Sales Could Drive Stock Surge for Target

These days are shaky days for retailers, with no one particularly sure just what it is customers want, let alone how to actually provide it for them. The good news, however, is that pushing online operations is likely to pay off at least in the near term. A new report from Barron’s says that focusing harder on e-commerce operations could have a significant upshot for Target, to the tune of a 20 to 30 percent stock gain.

Those gains won’t come all at once, of course, and Barron’s looks for that gain to come in over the next two years. Barron’s notes that Target has been making a significant push against Amazon, and that’s allowed Target to take back some of that otherwise lost market share for its own. The word from Barron’s says that ecommerce is already on the rise at Target, with ecommerce accounting for 4.4 percent of sales for the most recent fiscal year, up from 2.8 percent in the 2016 fiscal year.

One of the biggest gains Target made showed up last week, in the form of the GiftNow system, a tool allowing users to select and assemble a gift online and essentially submit a gift proposal to a certain recipient. The recipient can then view the proposed gift, and modify it to suit before allowing the gift to be sent. Additionally, the recipient can instead select a gift of a completely different sort but of the same value. Since the whole process is done online, there’s no need for a returns process at all.

Target’s plan takes one of the biggest troubles of gift giving—the returns process—and streamlines it to the point where everyone gets just what they want. Taking the returns process out of things can save some real time, and if we start applying that concept in large numbers, who knows how much time is saved over the aggregate?

Saved time commonly improves customer experience, and keeps users coming back. Users coming back means greater overall sales, and draws value to the stock. Target might well have found a market niche, but it will have to take care lest competitors imitate it and Target loses that edge.