Target to invest further in e-commerce after strong Q1 results

Target to invest further in e-commerce after strong Q1 results

American retail company Target will continue to invest more than $1 billion to improve its e-commerce platform and hardware following its outstanding online sales numbers in Q1 2015, according to its CEO and Chairman Brian Cornell.

In the first quarter, internet sales made up 2.8 per cent of the company’s overall sales, up from 2.1 per cent during the corresponding period in 2014.

Total sales rose from $16.66 billion to $17.12 billion, and online sales during the period reached $479.3 million. The $129 million growth in digital sales accounted for 28 per cent of Target’s sales growth in Q1 2015.

As a result, Target’s net income surged by 51.9 per cent to $635 million, compared to $418 million in Q1 2014.

“Digital sales growth was driven by higher traffic and a substantial increase in conversions,” Cornell told stakeholders during the retail chain’s quarterly earnings call on Wednesday.

Store and web sales increased amidst the early Easter and warmer weather, but the main sales driver was the unveiling of the Lilly Pulitzer fashion product line last month. Most products sold out during the first few days.

“We were disappointed, however, that digital channels were not able to accommodate the surge in traffic at the time of the launch and the team is working to address the root causes and learn from the experience as we prepare for the holiday season peak later this year,” he added.

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