Target AI Strategy: Using AI to Power a Turnaround

Target is using AI to help power a turnaround after its sales fell through 2025. “Accelerate technology” is one of four priorities in its March 2026 growth plan, and it named its first chief AI officer in August 2026. It reports AI results feature by feature, with no dollar value and no AI targets.

The ambition is growth. Target’s March 2026 strategic plan sets four priorities:

• lead with merchandising authority
• elevate the guest experience
• accelerate technology, to help teams move faster and personalize the guest experience
• strengthen team and communities

AI arrived when Target needed it. Chief Information and Product Officer Prat Vemana said: “I couldn’t have asked for a better time for AI to show up, because now we have a need” (Business Insider, via AOL).

Target wants to be wherever shoppers ask AI. Vemana told Fortune in November 2025: “Whether it’s ChatGPT, Perplexity, or Gemini, we want to be there to help answer a question that the guest has.”

The focus spans four areas:

• guests: personalization, an AI gift finder and a Target app inside ChatGPT
• merchandising: Target Trend Brain, an internal trend-spotting platform, and synthetic audiences that preview how customer groups will respond
• stores: Store Companion, a generative AI assistant for store teams, and AI-driven inventory
• supply chain: Proxima, a digital twin used to test inventory plans

Target has not said what it will not prioritize.

The money sits inside a bigger plan. Target is making about $2 billion of incremental investment in 2026: more than $1 billion of extra capital spending, for total capital spending of about $5 billion, and $1 billion of operating investment. The operating investment covers brand marketing and new technology, including AI. No separate AI figure has been disclosed.

AI now has a dedicated owner. Chandhu Nair, formerly of Lowe’s, joined on 24 August 2026 as Target’s first Chief AI Officer (Customer Experience Dive). His mandate is to bring “greater focus and coordination to AI across the enterprise.”

He reports to technology, not to the CEO. Nair reports to Vemana, as does Purvi Shah, newly promoted to SVP of user experience.

OpenAI is the main partner. In November 2025, Target launched a beta app inside ChatGPT that supports multi-item purchases, fresh food, and drive-up or pickup. In August 2026, CEO Michael Fiddelke pointed to agentic commerce partnerships with AI companies “such as OpenAI.”

Store tools are built in-house. Target built Store Companion in about six months, using real questions and process documents from store teams. It went to team members at nearly 2,000 stores in 2024 and coaches new and seasonal staff (Target press release).

AI is speeding up engineering. Vemana said AI coding tools helped Target rewrite its entire app in about 18 months, work he said would otherwise have taken years.

The workforce message is reinvestment. Fiddelke said: “Every hour we save is being reinvested to allow more guest interaction with a focus on friendliness and service” (Constellation Research). Vemana has said AI is not reducing Target’s need for tech workers.

Target cut about 1,800 corporate roles in October 2025, which it said was to simplify its structure.

Enablement is strongest at headquarters. Target rolled out ChatGPT Enterprise to about 18,000 employees. In November 2025, 4,300 headquarters employees took ChatGPT training with OpenAI, and Vemana said 92% were satisfied.

No usage mandate or training requirement has been disclosed.

Governance is not published. The sources reviewed show no responsible AI principles or AI governance body. Nair has said AI “will be measured on the frontlines.”

AI fluency, coded against the Lead with AI Fluency Matrix (September 2026 edition):

• Fluency floor: Not disclosed. Training is offered at headquarters, but no mandate or standard was found.
• Highest level evidenced: Level 3 (Integrating), company-claimed. Store Companion is part of daily store work at nearly 2,000 stores, engineers rebuilt the app with AI coding tools, and teams use Proxima to test inventory plans before rolling them out. Target has agentic AI in customer service and IT workflows, but no results have been published, so Level 4 is not evidenced.
• Portfolio design: Multi-level. Store teams, headquarters staff, merchants and engineers each have their own tools. No role-specific targets have been disclosed.

Target reports results feature by feature. All figures below are company-claimed.

AI shopping traffic is growing from a small base. In Q2 2026, Fiddelke said Target’s digital traffic from external AI platforms grew more than three and a half times the industry rate, but is “still small in total today” (PYMNTS).

Personalization results: creation of AI-powered teacher and college wish lists rose more than 50% ahead of back-to-school 2026.

Inventory results:

• Machine learning helped raise on-shelf availability for the top 5,000 items by more than 150 basis points (Q3 2025).
• Inventory reliability reached multi-year highs in Q2 2026, which Target linked to Proxima.

The business is recovering, but not because of AI alone. In Q2 2026, comparable sales rose 3.8% and digital comparable sales rose 8.7%. These are business results, not AI-specific.

Three things are missing: an AI value figure, AI targets and a dated AI roadmap.

Change log

• June 2024: Store Companion is announced for nearly 2,000 stores.
• October 2025: About 1,800 corporate roles are cut to simplify the structure.
• November 2025: The Target app launches in ChatGPT in beta, ChatGPT Enterprise reaches about 18,000 employees, and 4,300 train with OpenAI.
• February 2026: Michael Fiddelke becomes CEO.
• March 2026: The growth plan names “accelerate technology” as one of four priorities, with about $2 billion of incremental investment.
• August 2026: Chandhu Nair is named the first Chief AI Officer, and Q2 results report fast growth in AI platform traffic.

• Disclosure: 3 of 4. Target answers questions 01, 02 and 04, though its measurement is feature-level. It answers 03 only in part, because it has published no AI governance and no AI-specific budget.
• AI’s job is growth. The plan ties technology to a turnaround, not mainly to cost.
• AI is run as a technology program. The new Chief AI Officer reports to the technology chief, not the CEO.
• It is building for AI shopping early. The channel is growing fast, but Target says it is still small.
• The say-do gap is between priority and proof. “Accelerate technology” is a top-four priority, but there is no AI budget, target or governance disclosure yet.
• Watch the new Chief AI Officer’s first public goals, and whether Target starts reporting AI value in money.

What the numbers show: Revenue fell 4% and headcount fell 6%, so revenue per employee is roughly unchanged. The turnaround has not yet shown up as a productivity gain.

Revenue, headcount and revenue per employee, Fiscal 2022 to Fiscal 2025

• Fiscal 2022: $109.1bn revenue, 440,000 employees, $248k per employee
• Fiscal 2023: $107.4bn revenue, 415,000 employees, $259k per employee
• Fiscal 2024: $106.6bn revenue, 440,000 employees, $242k per employee
• Fiscal 2025: $104.8bn revenue, 415,000 employees, $252k per employee

Change, Fiscal 2022 to Fiscal 2025: revenue down 4%, headcount down 6%, revenue per employee up 2%.

Notes: Revenue is total revenue, as reported. Headcount is approximate full-time, part-time and seasonal team members at fiscal year-end, so it moves with the timing of the year-end. Target’s fiscal year ends in late January or early February; fiscal 2023 had 53 weeks.

These figures give context on scale and productivity. They do not show that AI caused any change. Sources: Target 10-K filings.

What is Target’s AI strategy?

Target is using AI to support a turnaround launched in March 2026, with “accelerate technology” as one of four priorities. It uses AI for personalization, merchandising, store operations and inventory, and sells through a Target app inside ChatGPT.

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Who leads AI at Target?

Chandhu Nair became Target’s first Chief AI Officer in August 2026. He reports to Prat Vemana, Target’s Chief Information and Product Officer.

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Can you shop at Target in ChatGPT?

Yes. Target launched a beta app inside ChatGPT in November 2025 that supports multi-item purchases, fresh food, and drive-up or pickup.

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Is Target cutting jobs because of AI?

Target has not announced AI-related job cuts. It cut about 1,800 corporate roles in October 2025 to simplify its structure, and its CEO says time saved through technology is reinvested in service.

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How is this profile put together?

Lead with AI profiles use public sources only, such as annual reports, earnings materials, filings and on-record interviews, dated at the time of writing. AI fluency is coded against the Lead with AI Fluency Matrix. Company figures are marked as company-claimed unless they have been independently verified.