Retailers have spent years trying to read demand earlier, react to trends faster, and make shopping feel less fragmented across stores and apps. In the highly competitive retail sector, Target is now tying more of that work to AI because it tries to return to sales growth and sharpen the way it plans products, serves shoppers, 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 recent technology, including AI. It also plans to raise capital investment by greater than $1 billion, bringing total capital spending to about $5 billion this 12 months for brand spanking new stores, remodels, technology, and supply chain work.
The strategy places technology closer to the centre of how Target operates. Rather than treating AI as a separate initiative, the corporate is weaving it into merchandising, customer experience, and personalisation as retailers look for methods to use data more effectively without slowing down decision-making. In its strategic plan, Target said certainly one of its 4 growth priorities is to “speed up technology” so teams can move faster and create “more personalised, joyful experiences for guests.”
AI helps predict retail trends earlier
One of the clearest examples is an internal platform called Trend Brain, which Target uses in apparel. Business Insider reported that the tool combines visual evaluation of fashion photos with social media sentiment evaluation to help predict which styles may gain traction in the following season. According to the report, the system lets designers pull together recent designs in weeks slightly than months, helping the corporate rotate collections almost twice as fast as before.
The same report said Trend Brain may give early warning when products may not sell in addition to expected. Gena Fox, Target’s head of apparel, told Business Insider that the corporate saw early signs that polka dots were trending, which allowed teams to buy more into that look and move away from styles that were underperforming.
AI is just not only getting used to goal ads or write copy. In this case, it feeds into decisions about what products get made, how quickly they reach shelves, and how closely assortments reflect what shoppers might want next. That brings merchandising and marketing closer together.
Campaign timing, seasonal launches, and product storytelling all turn out to be easier to align when trend signals arrive earlier.
Technology tools for store teams
Target can be using AI to support internal teams, though the general public details remain limited. Business Insider reported that managers and store associates now have Target-designed tools on handheld Zebra devices that simplify tasks similar to planning displays, prioritising restocking work, and getting support without having to go to a desktop computer. The goal is to reduce time spent on routine tasks and unencumber staff to focus more on customers in stores.
CEO Michael Fiddelke framed the technology push in similar terms in the course of the company’s earnings discussion. As quoted by CIO Dive, he said, “We know those tech investments repay with stronger experience, whether that’s digital or in store, after we’re organising our team to unencumber tasks in order that they will support our guests much more.”
Updating the digital shopping experience
Target can be updating how its app supports shopping. Business Insider reported that the corporate rewrote the app’s code base, a project that Prat Vemana, Target’s chief information and product officer, said would once have taken years but was accomplished in about 18 months with help from AI coding tools.
The same report said the app includes features similar to a shopping list scanner that turns handwritten notes right into a shoppable list and a store mode that pins list items on a map of a particular location. Business Insider also reported that a few third of in-store shoppers use the app during store visits.
The financial backdrop helps explain why the corporate is pushing ahead with these changes. 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 corporate expects net sales growth of around 2%.
Reuters also reported that Fiddelke is trying to lead a turnaround after a difficult 2025, with greater than $2 billion in planned investment for 2026.
The broader shift is that AI is starting to influence more parts of retail operations directly. Instead of focusing only on promoting or customer support tools, firms are using it to guide product decisions, improve store execution, and refine digital shopping tools.
In Target’s case, the goal is to make decisions earlier and carry them through merchandising, stores, and the app with fewer delays. If those systems work as intended, AI becomes a part of how demand is interpreted and acted on, slightly than something applied only after products reach the market.
(Photo by Christina Hawkins)
See also: Coca-Cola expands AI use in marketing and product development
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