Prat Vemana, Target’s chief information and product officer, says improved technology is a throughline in the retailer’s recovery plan after several years of sluggish sales. The company is putting $6 billion into stores, workers, and technology this year to turn things around. Comparable sales have dropped in 11 of the past 13 quarters.
Two priorities are sitting at the top of Vemana’s list: merchandising and demand forecasting. On the merchandising side, Target is building out a tool called Target Trend Brain, an AI system that helps designers sort through runway shows, social media, and written reports to identify trending colors, patterns, and cuts. Designers can also prompt it in natural language to generate initial versions of designs. What used to take weeks can now take hours, Vemana said.
On the forecasting side, the challenge is trickier for seasonal and trendy items than for everyday staples. Algorithms that work well for a box of Cheerios don’t translate cleanly to a new apparel line, and that gap is where Target’s tech team is focused.
Target is also moving early on agentic commerce, building integrations that let shoppers buy products directly through ChatGPT and Google’s Gemini. The retailer is also running ads on ChatGPT and working to make sure external AI shopping agents can complete purchases on its website. Vemana said he would rather be early and learn than wait for the trend to mature.
Retail broadly is moving in the same direction, with nearly two-thirds of CIOs planning to invest in AI and machine learning this year per a Gartner survey. Walmart, Kroger, and Home Depot have made similar investments under pressure from Amazon.
Technology alone won’t solve everything. Target’s merchandising team acknowledged the company drifted toward a blander product mix when shoppers expected sharper, more trend-forward options. Apparel and home goods represent about 30% of sales, and TD Cowen analysts said rebuilding credibility in those categories is what will actually get customers back. CEO Michael Fiddelke reported positive sales in February, the first encouraging signal after a long stretch of declines. The next earnings report, expected in late May, will show how much ground has been recovered.
