How Target uses generative AI across merchandising and store operations

Target announced in March 2026 that it would make an incremental 1 billion dollar operating investment and increase capital investment plans by more than 1 billion dollars to approximately 5 billion dollars, with spending directed towards new technology including AI. By the second quarter of 2026, the retailer had spent 2.4 billion dollars in capital expenditures, up 30 per cent from the same period the previous year, amid heightened technology investments. The investments come as Target reported full year net sales fell 1.7 per cent to 104.8 billion dollars in fiscal 2025, with the company expecting net sales growth in a range around 2 per cent for 2026 initially, later revised upward to around 4 per cent.

What is Trend Brain and how does it work?

Trend Brain is a generative AI platform that scans global data to identify emerging styles and design patterns, helping merchants spot trends early and make faster buying decisions. The tool combines visual analysis of fashion photos with social media sentiment analysis to help predict which styles may gain traction next season. Target describes Trend Brain as a GenAI powered trend intelligence platform that blends human creativity with machine intelligence to surface emerging ideas and speed up product development, enabling merchants to respond to trends quickly and bring the right mix to market faster.

The system lets designers pull together new designs quickly, helping the company rotate collections almost twice as fast as before. Target said it would maximize its in house design capabilities and trend tracking technology to bring new styles to consumers faster.

Which AI tools support store operations?

Target announced in June 2024 that it would introduce Store Companion, a generative AI technology for store employees, at all of the company's nearly 2,000 stores nationwide by August. The company launched the AI powered chatbot tool as an app on store associates' handheld devices, designed to help store associates answer process and procedure related questions. Target's in house technology team developed the generative AI chatbot in about six months by using frequently asked questions and process related documents from stores across the US, with the tool in pilot testing at about 400 locations ahead of the planned rollout.

The tool has been used more than 50,000 times with an average chat time of less than 1 minute, according to Target's COO and CFO Michael Fiddelke during an earnings call. Behind the scenes, AI algorithms now monitor shelf stock and product flow in real time, alerting team members before shortages occur. Target is using AI to spot when items are running low earlier than before, helping store leaders take real time action hour by hour.

Target's Agent Assist and Store Companion help teams in service centres and stores serve guests, delivering the most relevant information instantly. Store associates use AI assistants like Agent Assist and Store Companion to handle real time questions and inventory tasks.

How does Target use AI in digital merchandising?

Target's digital platforms use a rebuilt search and recommendation engine that interprets natural language prompts, such as cute, eco friendly or sturdy, to deliver results that reflect intent and availability. The future of SEO is GEO, or generative engine optimisation, with some Target shoppers beginning to use longer queries amid the adoption of generative AI, according to Ranjeet Bhosale, vice president of digital product management at Target.

During the holiday season Target introduced its Bullseye Gift Finder, a generative AI driven product recommendation tool that gave personalised product recommendations for kids based on factors including age, hobbies and favourite brands, with the company seeing great adoption and thinking about how to scale that capability during other seasonal moments. Target is expanding the use of AI agents across merchandising, inventory and digital marketing.

Does Target work with external AI platforms?

Target launched an app on OpenAI's ChatGPT platform that would offer a complete shopping experience, allowing consumers to purchase multiple items in a single transaction, shop for fresh food and select omnichannel fulfilment options including drive up and pick up. Target executive Prat Vemana said the retailer wants to be present in ChatGPT, Perplexity or Gemini to help answer questions guests have, with the minute Target comes to their mind.

AI driven traffic to Target leapt 2,000 per cent in the first quarter of 2026 compared to the previous year, versus a nearly 400 per cent increase in AI driven traffic to retail sites overall. In January 2026, Target announced that shoppers would be able to browse product listings and buy directly from Target in AI Mode in Google Search and the Gemini app. Starting in February 2026, Target was among the first companies to work with OpenAI to test contextual advertising in ChatGPT.

Which vendor facing AI tools has Target developed?

Target launched a vendor facing AI assistant called Joy, designed to help vendor partners access answers around the clock, supporting partners globally by helping them navigate policies, workflows and operational requirements without waiting for human support. Joy and Guest Assist solutions help Target guests and vendor partners resolve a variety of questions and issues much faster, complemented by personal support when needed, with Joy trained on an extensive knowledge base of 3,000 plus FAQs and delivering responses to vendors instantly.

What leadership changes has Target made for AI?

Target announced its first ever chief artificial intelligence officer in August 2026. The company named Chandhu Nair to the role, who came to Target from home improvement retailer Lowe's where he was senior vice president of stores, data, AI and innovation. Nair joined on 24 August 2026 as chief AI officer and senior vice president, tasked with bringing greater focus and coordination to AI across the enterprise and forging a closer partnership between the company's AI operations and its customer experience.

Target's annual report for fiscal 2026 stated the retailer enhanced artificial intelligence capabilities across merchandising, planning, inventory management and personalisation, and expanded the use of AI powered tools to simplify work for store and headquarters teams. Target's strategic priorities include accelerating technology, with the retailer investing in technology and leveraging AI to make shopping more joyful and support teams.