Target Corp. is doubling down on its ecommerce strategy with ambitious plans to grow Target Plus, its third-party online marketplace, into a $5 billion business within the next five years.
After ramping up investments last year, the retailer has already grown Target Plus to a $1 billion marketplace. And it’s now expanding at a double-digit pace. The success of Target Plus underscores the company’s broader digital commerce strategy, as online marketplaces become a key growth driver for major retailers.
Target Plus first launched in 2019 as a curated online marketplace. Target carefully selects third-party sellers to complement its in-store assortment. Unlike competitors like Amazon and Walmart that allow any seller to join, Target has maintained a consumer-led approach. The company collaborates only with trusted partners that align with its brand and meet high-quality standards. This selective strategy has built consumer trust and ensured a consistent shopping experience that mirrors Target’s in-store reputation, the company says.
“We’re not opening the doors to any seller,” CEO Brian Cornell told analysts on a recent year-end earnings call. “We’re focused on building relevance and trust by collaborating with partners that complement our assortment and help us provide more of the breadth consumers are looking for.”
Amazon, Walmart and Target are the largest Mass Merchants in the Top 2000 Database. Along with Costco, they make up the “Big Four” in the newly published State of American Ecommerce Report. The Top 2000 is Digital Commerce 360’s ranking of the largest online retailers in North America by annual ecommerce sales.
Target is also No. 64 in the Global Online Marketplaces Database. That database ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV).
How the Target Plus marketplace is growing its GMV
Target Plus currently features products from over 1,500 trusted brands in categories where Target traditionally lacks a strong presence. Those include furniture, home décor, and specialty apparel. Brands like Dupre and Modern Lux have contributed to the marketplace’s growth. They’ve helped Target reach new customer segments while enhancing its overall product selection.
This strategic expansion has also fueled growth in Target’s Home business. As more consumers look to Target for home products, Target Plus has emerged as a valuable tool to expand the assortment without increasing inventory costs. The marketplace allows Target to sell a wide range of products from distinctive brands without the need to buy, store, and move the inventory itself. This capital-light model is particularly effective for slower-turning items, oversized products, and goods with variable demand patterns.
Target’s partnership with Shopify has played a key role in accelerating the growth of Target Plus, Cornell told analysts. By working with Shopify, Target can more easily identify and onboard emerging brands. That streamlines the process of adding new products to the marketplace. This also has allowed Target Plus to respond more quickly to changing consumer trends. As a result, Target can broaden its product mix with a wider range of price points.
In the past year alone, Target Plus accounted for 10% of Target’s external search volume, underscoring its growing influence on digital traffic. Target has been testing and iterating its marketplace strategy based on guest feedback, ensuring that the product assortment remains relevant and meets customer needs.
“We’ve been on a journey to scale up our marketplace offerings in a way that’s logistically feasible and cost-effective,” Cornell said. “And with Shopify’s support, we’re moving faster than ever before.”
Target
Impact of Target Plus on retailer’s sales
While Target Plus remains a small contributor to Target’s overall profit and loss statement today, the company sees a compelling long-term growth opportunity. In addition to aiming for $5 billion in GMV (gross merchandise value) by 2029, it expects Target Plus to strengthen customer loyalty and increase repeat purchases.
Target’s broader digital ecosystem includes its fulfillment network and loyalty program, Target Circle. That ecosystem is helping drive the success of Target Plus. Target Circle is one of the largest retail loyalty programs in the U.S. It helps to fuel Roundel, Target’s retail media business. This creates a powerful feedback loop, the retailer says. Customer data, advertising revenue, and marketplace growth work together to strengthen Target’s competitive position.
And with over 350 million more trips to Target in 2024 compared to 2019, the company is capitalizing on its ability to blend digital and in-store experiences. By combining the ease and breadth of an online marketplace with the trust and familiarity of the Target brand, Target Plus is poised to become a key pillar of Target’s future growth strategy, the retailer says.
“As a result of this momentum, we expect Target Plus to be a significant contributor to both our top and bottom line in 2025 and beyond,” Cornell told analysts. “We’re building a marketplace that reflects the Target experience — trust, quality, and ease — while providing more options for our guests to shop the way they want.”
Target’s strategic push into digital marketplaces reflects a broader shift in consumer behavior toward online shopping. With a $1 billion marketplace already in place and a clear roadmap for growth, Target Plus is well-positioned to be a major driver of Target’s overall ecommerce success in the years ahead, the company says.
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