(Bloomberg) -- Target Corp. is weighing a new paid membership program akin to Amazon Prime or Walmart+ as it looks for ways to fuel growth and compete against bigger rivals, according to people familiar with the matter.
Titled Project Trident internally, the new program could launch as soon as this year, these people said, declining to be identified discussing private information.
Target already offers a free loyalty program called Target Circle that gives users deals and rewards for their purchases. The new program would go beyond that to offer other benefits and require a fee. It could incorporate Shipt, the grocery-delivery business the company bought in 2017, some of the people said.
The Minneapolis-based company has faced months of declining sales, as consumers pull back on discretionary spending. Target also faced controversy over its Pride Month assortment last year, when it pulled some products after pushback from consumers.
Target shares rose 2.4% at 9:37 a.m. on Wednesday in New York. The stock fell 18% over the past year while the S&P 500 Index gained 20%.
Although the retailer would be a relatively late entrant in the paid membership arena, an enhanced membership program could help Target bring in additional revenue and deepen loyalty among its customers.
Memberships typically offer users free delivery for digital orders, encouraging people to shop both online and at stores. Customers who shop across platforms are often the most valuable because they tend to spend more overall, though it remains to be seen how many retail subscriptions people are willing to pay for.
Most of Target’s competitors have offered a membership service for years. Amazon.com Inc., which has more than 200 million members, launched its Prime program in 2005.
Walmart Inc., which started Walmart+ in 2020, has gained subscribers as it’s ramped up marketing. Kroger Co. has said its Boost paid membership program, launched in 2022, has performed better than expected. Both Walmart and Kroger have been growing their memberships in part by pitching perks such as gas savings — a strategy that Target would need to consider to be competitive. Neither company discloses its subscriber counts.
(Updates shares in the fifth paragraph.)
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