Target Touts Jump in Traffic From AI Platforms as Sales Climb

Target is experiencing a surge in sales alongside increased digital traffic from artificial intelligence (AI) platforms, as revealed in its most recent earnings report. The retailer's second-quarter 2026 results, announced on August 19, reported a 3.6% rise in guest traffic and a 3.8% increase in comparable sales. CEO Michael Fiddelke attributed this growth to the retailer's partnerships with AI companies like OpenAI during an earnings call.

He noted that while this growth is currently modest, it is expected to expand as more consumers discover the benefits of AI-driven shopping. Target's digital traffic, derived from these external AI platforms, has surged more than three and a half times compared to the previous year. AI technology is being utilized to enhance the customer experience, with examples including personalized wish lists for students and teachers, which saw a more than 50% increase this year before the back-to-school season.

Internally, Target is leveraging Proxima, a digital twin of its supply chain, to more efficiently manage inventory and make informed decisions. While certain segments such as home and apparel are relatively stagnant, the retailer is witnessing momentum in high-frequency categories, including a 15% surge in food and beverage sales.

Additionally, digital engagement is on the rise, with digital comparable sales growing by 8.7%. To bolster its digital initiatives, Target appointed Chandu Nair as its first chief AI officer last week, replacing him with his appointment set to begin on August 24. Nair previously served as senior vice president of stores, data, AI, and innovation at Lowe's.

He believes that a more coordinated approach to AI can enhance inventory management, streamline operations for employees, and facilitate quicker, well-informed business decisions. Fiddelke, who began his role at Target in February, emphasized that technology, particularly in the area of AI, is a top priority for the retailer. He aims to create a more engaging and welcoming digital experience for customers, eliminating barriers to enhance their shopping journey.