For Target, generative AI couldn’t come at a better time.
That’s the assessment Target’s head of technology, Pratt Vemana, told Business Insider after newly installed CEO Michael Fidelke spent the morning crafting an ambitious turnaround strategy at the company’s Minneapolis headquarters.
The company had just reported its 13th consecutive quarter of weak sales (a period before major competitors like Walmart and Costco took market share). Leaders from across the organization came together to make the case that today is a new day for Target.
“I don’t think there’s a better time for AI to be here, because we need it now. We have bold plans ahead of us,” Vemana said.
Target CEO Michael Fidelke, who officially took on his new role in February, will speak at the retailer’s 2026 Financial Community Conference. Dominic Reuter/Business Insider
Looking at next year’s numbers alone, Target’s plans are bold. $1 billion in additional capital investment, $1 billion in new operating commitments, 30 new stores, 130 renovations, an overhaul of up to 75% of the product lineup in certain categories, and incredibly fast product releases.
Fidelke said the efforts are already paying off with an acceleration in sales in February, and the company plans to report sales growth in each quarter of 2026.
Underpinning the success or failure of almost every aspect of that strategy are the numerous AI-powered tools developed by Vemana’s team.
“Technology is essential to everything we do,” Vemana said.
Target has a long technology heritage, but competition is fiercer than ever
Target has long relied on vast amounts of data to make marketing and operational decisions, and was one of the first to apply machine learning to its business.
The company’s predictive analytics arm even caused controversy in 2012 when it revealed buyer behavior. It was done Used to infer intimate things about a shopper, such as pregnancy. (It is unknown whether this actually happened.)
More than a decade later, in an age of meta-AI glasses, Ring doorbells, and hackable robot vacuums, it almost seems quaint. In fact, an entire industry now generates astronomical profits by anticipating users’ smallest impulses.
Target has been leveraging machine learning in its own business for years, and now its rivals are doing the same. Dominic Reuter/Business Insider
And in just the past few years, generative AI technologies have begun to orbit what their ML predecessors were able to do. Giant companies like Amazon and Walmart, on the other hand, enjoy the advantages of scale.
In other words, the competition has caught up, and machine learning, which was once a huge advantage for Target, is arguably less of an advantage in the fast-paced world of AI.
But with companies around the world citing AI to reduce technology talent, Vemana said teams in the U.S. and India will need to match the output of even larger companies.
“Generative AI has actually opened up a whole other dimension of growth,” he said.
Target invests in tools to help teams save time and predict trends
Using the new Trend Brain platform, Target’s apparel team combines visual analysis of fashion photos with social media sentiment analysis to predict what styles will be popular next season.
This allows designers to put together new designs in weeks instead of months, and allows Target to rotate collections nearly twice as fast as before, said Gina Fox, Target’s head of apparel.
It can also give companies early warning about products that may not sell as well.
“We saw polka dots trending pretty early on,” she added of the swimwear line. “So we were able to really go back and incorporate more of that style and pull back from styles that weren’t performing well.”
Target’s “Western Edit” series was designed using the Trend Brain platform. Dominic Reuter/Business Insider
Trend Brain offers another advantage when dealing with the endless details of fashion campaign design.
“If you do this for a few hours, you’re going to skip some things, right?” Vemana said. “AI never gets tired.”
And once that product arrives in the store, managers and employees can use a new suite of Target-designed tools on handheld Zebra scanners to simplify everything from planning displays to prioritizing inventory replenishment tasks to getting instant support without having to go find a desktop computer and fill out forms.
“We really value the human touch. That’s what’s important,” Vemana said. “Anything that gives time to the team will be given back to the guests, and they will be happy.”
Meet where and how your customers shop
Agent shopping made headlines last fall, and Target was one of the first retailers to offer multi-item baskets through ChatGPT. It is also one of Google’s partners in the development of open commerce protocols on Gemini.
But beyond these more obvious applications, Vemana said AI is helping the Target team improve the way customers shop in the app.
First, the executive said the way generative AI processes information requires a complete overhaul of the app’s code base, a task made much faster by the AI coding companion.
Target’s apps are increasingly packed with AI features. Dominic Reuter/Business Insider
“We’ve already rewritten the entire app, in about 18 months, something that would have taken years,” he said.
And this shift isn’t just about chatbots, as one-third of in-store shoppers use an app during a store visit.
The app itself has several customer-friendly features, including a shopping list scanner tool that turns handwritten notes into shoppable lists, and a store mode that pins list items on a map of your physical location.
Because Target has not split its AI investment into full amounts, the big question for companies implementing AI is whether the capital required to implement AI will generate a positive return on investment.
Vemana emphasized that Target views this technology as essential to its growth plans.
“We don’t just do AI for the sake of doing AI,” he says. “We are making fundamental enhancements to ensure we can apply the right kind of AI in the right place.”
