Target's AI Expansion Despite Failures
Source: futurism.com
Target's AI Push Continues
Target announced in late 2023 that it was implementing artificial intelligence to improve the holiday shopping experience. This announcement came just after the release of OpenAI's ChatGPT. Target claimed it was using AI to become the "future of retail." However, a class action lawsuit alleges this initiative is a surveillance operation that includes facial recognition software. One plaintiff claimed a loss prevention manager viewed her LinkedIn profile after she shopped at an Illinois Target store. Target also introduced a generative AI "Store Companion" to make employees more efficient, and Roundel, an AI-marketing platform.
Financial Performance and New Initiatives
Over two years after the launch of Target's AI initiative, the company's first quarter earnings fell short, with revenue decreasing $24.5 billion from the previous year. Total sales decreased by three percent, and in-store foot traffic declined. Target revised its 2025 financial forecast from positive to negative, causing its stock to drop. Despite blaming tariffs and boycotts for these issues, Target plans to use more AI to address them.
Enterprise Acceleration Office
Following its poor earnings results, Target announced a "multi-year Enterprise Acceleration Office," headed by COO Michael Fiddelke. Target stated this office will increase the company's speed and agility, helping it progress on its growth roadmap. Fiddelke mentioned during an earnings call that he intends to "more boldly leverage technology and AI." He suggested Target has technology projects that will "modernize and streamline core inventory management and allocation processes," similar to the systems the company previously promoted in 2023. The company's Chief Information Officer Brett Craig said that AI helps ensure that guests find the items they need by forecasting product demand and ensuring items remain in stock. He also stated that AI is used to ensure inventory is in the right locations so the company can respond efficiently as demand changes.
Customer Concerns
It is unclear how Target can implement more AI in a way that benefits shoppers, as customers frequently complain about long wait times at self checkouts, messy aisles, and empty shelves. It is hard to imagine AI resolving these issues.