The news: Target is expanding next-day delivery service to 35 US markets by the end of next month as it prepares for the holidays and looks to better compete with Amazon and Walmart.

• Markets that will gain next-day delivery include San Diego; Orlando and Tampa, Florida; Charlotte, North Carolina; and Cleveland.
• The expansion will raise Target’s next-day delivery reach to 54% of the US population from 20%, per the Associated Press, which cited a company executive.

Next year, the retailer plans to add the service to an additional 20 cities.

Why it matters: Target’s performance this year has lagged mass merchant rivals Amazon and Walmart, which are both benefiting from speedier deliveries. Walmart said it would offer next-day delivery in select cities for some marketplace orders fulfilled by third-party sellers, and Amazon is working to expand its same- or next-day delivery to more than 4,000 smaller communities by year’s end.

Our take: In stepping up its next-day delivery, Target recognizes that the competitive stakes in retail are escalating. Its recent sales softness suggests it may be at risk of falling off shoppers’ radar as speed, selection, and convenience become critical retail differentiators.

Enhancing next-day delivery moves can help improve Target’s fortunes but won’t be enough. To really close the gap with its mass merchant peers, the retailer needs to combine speed with a stronger product assortment, deepen loyalty perks, and lift employee morale.

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