Target bets on AI-powered loyalty as smart commerce grows

Target is betting that loyalty is no longer just a coupon program. As Euromonitor projected AI-influenced e-commerce could top 700 billion dollars by 2029, the firm said smart loyalty systems are becoming more intelligent, more personalized and more central to retail competition. For Target team members, that shift matters because the guest journey is being shaped long before anyone walks into the store or hits the pickup lane.

Target’s March 3 strategy update put real money behind that bet. The company said it would invest an incremental 2 billion dollars in 2026, including more than 1 billion dollars in additional capital expenditures and 1 billion dollars in additional operating investments. It said the plan centers on strengthening loyalty and engagement, accelerating technology including AI, and scaling Target Circle 360, Roundel and Target Plus. That is not just a marketing line. It points to a store operation that will be pulled harder by app-based behavior, sharper promotions and more finely timed demand.

Target has been building toward this for years. It expanded Target Circle nationally on Oct. 6, 2019 after 18 months of beta testing in six markets. In March 2024, the company said it would reimagine the program into three membership options, including a free-to-join version. Target Circle 360 launched in April 2024 as the paid tier at 99 dollars a year, with a limited-time 49 dollar intro offer for some signups. Target said more than 13 million members joined Target Circle in 2024, and in 2025 it said it aimed to triple the Circle 360 membership base over three years.

The practical consequences show up in the work. Target Circle 360 offers unlimited same-day delivery on orders over 35 dollars, monthly freebies, early access to deals and access to Shipt’s network of more than 100 grocers and specialty retailers. In May 2025, Target removed same-day delivery price markups across that full network for members. The company says members can save seven hours a month and more than 300 dollars a year on average, according to its estimates. That kind of promise changes what guests expect when they reach a store, and it raises the stakes for fulfillment speed, substitutions, pickup accuracy and how clearly team members can explain offers and app-based savings.

Target is also pushing loyalty into AI-powered shopping environments outside its own app. In January 2026, it said shoppers would soon be able to browse and buy Target products in Google Search’s AI Mode and the Gemini app using the Universal Commerce Protocol. Put together, the message is clear: Target wants loyalty, search and checkout to blend into one system. For stores, that means smarter personalization could reshape when guests shop, what they expect to find and how hard the floor has to work to keep the experience feeling easy.