On Target’s fiscal Q4 2025 earnings call, analysts asked executives how the retailer is planning to factor in artificial intelligence (AI) and agentic commerce into its business.
CEO Michael Fiddelke said his “hunch” is that Target is “a ways away from understanding every economic put and take.” Target’s focus, he said, is on being where its consumers are.
That includes “being at the forefront of innovation” and how AI will play a role in the consumer purchase funnel, he said. On that front, he said Target has two advantages: scale and curation.
“We’re at the forefront of innovation with some of the big tech partners in this space,” Fiddelke said. “And that allows us to make sure that just like we did with social as it exploded, we’re staying front and center for guests as the way they shop evolves in the months and years to come, in ways that probably none of us can fully predict.”
Target is No. 5 in the Top 2000 Database. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.
Target is also No. 64 in the Global Online Marketplaces Database. That database ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV).
How Target is approaching agentic commerce
“Being one of the first retailers to have kind of an immersive shoppable experience in some of the Gen AI platforms, I think, is a good example of us leaning in, in the right way there,” Fiddelke said.
That refers to Target having launched an app on OpenAI’s ChatGPT platform. Target said at the time that it would offer “a complete shopping experience” through its ChatGPT app. The app allows consumers to purchase multiple items in a single transaction, shop for fresh food and select omnichannel fulfillment options, including drive up and pick up.
It launched the app in beta the week of Thanksgiving 2025.
Target also joins Albertsons and Williams-Sonoma in signing up to test new ChatGPT ads. ChatGPT is currently testing its new ads alongside organic responses to prompts on OpenAI’s platform. The early pilot with OpenAI allows participating retailers to explore AI as a new retail media channel.
“Some of what AI does is try to bring you the best thing fastest,” Fiddelke told investors. “And we run the whole business that way because of the work we do to curate the very best in both in-store and online. And so I actually think that in many ways, we’re kind of wired to think about the same way AI is going to think when it comes to curating what matters most.”
Target on ‘using AI to its fullest’
Fiddelke said that when Target is “using AI to its fullest, it’s personalizing a guest experience so that if you open the Target app, the offers you get are as relevant as they can be because AI is helping make that happen.”
On the operational side, capitalizing on AI includes using it to optimize unloading a truck and other store-focused tasks, Fiddelke said.
Chief financial officer James Lee said in terms of the “kind of sales” Target needs to deliver, the retailer targets low- to mid-single-digit rates over time on overall sales. That drives leverage, he said.
“And I think we’re going to start seeing that — the beginnings of that — this year,” Lee said.
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