Retailers always try to read demand earlier and make shopping feel less fragmented in stores and apps. In the competitive retail sector, Target is now tying more of that work to AI as it tries to return to sales growth and sharpen how it plans products and runs its business.
The company said recently that it plans to make an incremental $1 billion operating investment in 2026 to improve the guest experience, with spending on store changes, payroll and training, brand marketing, and new technology. It also plans to raise capital investment by more than $1 billion, bringing total capital spending to about $5 billion this year for new stores and supply chain work.
The company is weaving AI into merchandising and personalisation as retailers look for ways to use data more effectively without slowing down decision-making. In its plan, Target said one of its four growth priorities is to “accelerate technology” so teams can move faster and create “more personalised, joyful experiences for guests.”
AI helps predict retail trends earlier
One example is an internal platform called Trend Brain, which Target uses in apparel. Business Insider reported that the tool combines visual analysis of fashion photos with social media sentiment analysis to help predict which styles may gain traction next season. The system lets designers pull together new designs quickly, helping the company rotate collections almost twice as fast as before.
Trend Brain gives early warning when products may not sell as well as expected. Gena Fox, Target’s head of apparel, told Business Insider that the company saw early signs that polka dots were trending, which allowed teams to buy more into that look.
AI feeds into decisions about what products get made and how closely assortments reflect what shoppers may want next. That brings merchandising and marketing closer together. Campaign timing, seasonal launches, and product storytelling all become easier to align when trend signals arrive earlier.
Technology tools for store teams
Target managers and store associates have Target-designed tools on handheld Zebra devices that simplify tasks like planning displays and getting support without having to go to a desktop computer. The goal is to reduce time spent on routine tasks and free up staff to focus more on customers in stores.
CEO Michael Fiddelke said: “We know those tech investments pay off with stronger experience, whether that’s digital or in store.
Updating the digital shopping experience
Target is updating how its app supports shopping, rewriting the app’s code base. Prat Vemana, Target’s chief information and product officer said the task would have taken years but was completed in about 18 months with help from AI coding tools.
The app also includes a shopping list scanner that turns handwritten notes into text and a store mode that pins listed items on a map. About a third of in-store shoppers use the app during store visits.
In its recent earnings release, Target said full-year net sales fell 1.7% to $104.8 billion in fiscal 2025, while comparable sales declined 2.6%. For 2026, the company expects net sales growth of around 2%. Reuters reported that Fiddelke is trying to lead a turnaround after a difficult 2025, with more than $2 billion in planned investment for 2026.
Target’s goal is to make decisions earlier and carry them through merchandising and the app with fewer delays.
(Photo by Christina Hawkins)
See also: Coca-Cola expands AI use in marketing and product development
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