Target plans roughly $5 billion in capital spending next year, including an additional $1 billion for 2026, as it works through declining comps and weaker traffic while leaning into categories that are still growing, notably beauty.
Target will direct about $5 billion toward new and remodeled stores, experience upgrades, and technology and digital fulfillment, with leadership emphasizing larger-format boxes that are outperforming initial plans and store-floor changes designed to accelerate “merchandising authority” and discovery.
The chief of the 185-year-old Hong Kong brand said that in Southeast Asia, she sees Gen Z’s preference for brick-and-mortar prevailing despite abundant e-commerce options, with fast-moving K‑, J‑, and C‑beauty trends and localized offerings powering engagement—signals that U.S. retailers seeking to make beauty a traffic engine can learn from. “For younger customers, they want to be in the store, they want to get consultancy, they want to be able to touch the product—and this is what we can offer.”
Beauty continues to outperform broader discretionary categories at Target, aligning with global patterns highlighted by Ngai: young consumers crave novelty, curation, and guidance, which flourish in physical settings with events, sampling, and influencer-driven moments. Target’s plan to refresh floor pads and facilitate more discovery in home and other departments borrows that beauty playbook—frequent newness, better adjacencies, and richer storytelling—paired with AI-enabled speed to market.
Walmart is leaning into an AI-fueled, low-price, high-scale omnichannel model—expanding retail media, membership, marketplace, and automated fulfillment—while Amazon is doubling down on same-day grocery logistics, Generative AI, and a more unified Fresh strategy that treats physical touchpoints as extensions of e-commerce rather than destinations. Both are investing heavily in AI to personalize discovery and compress delivery windows, with Walmart emphasizing stores-as-fulfillment and retail media margins and Amazon emphasizing speed, network density, and AI-driven operations at massive scale.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
