Target launches paid subscription Target Circle 360

Target Said on Tuesday it would launch a paid subscription program next month, bucking the strategy of its rivals Amazon And wal-mart,

The subscription tier, Target Circle 360, will include unlimited free same-day delivery within one hour with no delivery fees for orders over $35 and two free-day shipping, along with other perks. Target’s chief guest experience officer Cara Sylvester, who announced the program at an investor event in New York City on Tuesday, said the company is considering a wide range of potential benefits to improve the membership offering.

Sylvester said the paid subscription tier will launch in early April and will initially cost $49 per year. It will cost $99 per year after the company’s promotional period ends on May 18. Customers who have a Target Circle credit card will be able to pay the low price of $49 per year beyond that.

The retailer will also relaunch its free Target Circle loyalty program, which debuted in 2019, to make it easier to use and more personalized. For example, members who belong to the free program will have discounts automatically applied instead of having to scan deals on the app, he said.

Target will also rebrand its credit card program. The Circle Card will include an additional 5% discount on customers’ purchases, free two-day shipping on many items, and extended time to make returns. This card was previously known as the Target RedCard.

The big-box retailer is turning to a new revenue stream as it tries to boost weak sales. Its fiscal fourth-quarter earnings and revenue on Tuesday beat Wall Street expectations, but its comparable sales have declined for three consecutive quarters.

With this move, Target is also following in the footsteps of retailers that have made subscription fees a money-maker and sales driver. It’s unclear how many people can sign up for the paid tier. According to the company, the free Target Circle has more than 100 million members.

Amazon launched its Prime program in 2005, which included features such as free two-day delivery and streaming of popular movies and original TV shows. It costs $139 per year or $14.99 per month, with a video-only subscription option at $8.99 per month.

Amazon doesn’t often share Prime membership totals. According to the last letter to shareholders written by former CEO Jeff Bezos, the company had more than 200 million Prime members worldwide at the beginning of 2021.

Walmart launched its own program called Walmart+ in 2020. It costs $98 per year or $12.95 per month, which includes benefits like free shipping, free grocery delivery for orders of at least $35, and gas discounts.

Target is turning to its competitors’ playbooks for a reason: Walmart CEO Doug McMillon told investors on the company’s earnings call in February that Walmart+ members spend nearly twice as much as non-members a year. buy more during.

Walmart hasn’t said how many people have subscribed to Walmart+, but its CFO, John David Rennie, said on the earnings call that its membership is growing by a double-digit percentage.

Don’t miss these stories from CNBC Pro: