How Bengaluru has become integral to US retailer Target’s tech innovation

Minneapolis-headquartered mass-market retail chain Target recently expanded its Global Capabilities Centre (GCC) footprint by leasing over 800,000 sq. ft of space in Bengaluru and consolidating operations. The management of the Fortune 500 firm, which operates over 2,000 stores in the US, in its recent earnings call held in May, stressed continued investments in technology across several fronts, including consumer experience and supply chain.

Target's focus on tech innovation

With over 5,700 employees and 40% of the company's technology team based in Bengaluru, Target calls its India GCC its second integrated headquarters. With a mix of experienced and young hires, the India team has become integral to redesigning the company's way of doing business in the AI age across design, app experience, personalisation and supply chain management.

The focus now on AI readiness is across the board. "I look at it from both foundation and innovation lenses. So, strengthening the foundation, whether it's technology foundation or core retail systems, we look at that. When it comes to innovation, innovating both on the style and design front, as well as innovating our platform for digital disruption," said Prat Vemana, executive vice president and chief information & product officer, Target.

With the company having partnerships with most large language model (LLM) companies such as OpenAI, Anthropic and Google, its internal platform, 'Think Tank', has been built to operate flexibly. The company also has close to 300 AI agents in production. With most consumer companies, including heavyweights such as Walmart and Amazon, doubling down on investments in their respective agentic AI ecosystems for both internal and external use cases, Target believes AI has become embedded across the business.

"Whether it's guest experience, whether it's merchandising, whether it's store operations and inventory management, almost every one of them has AI. So you can no longer separate, this is the AI cost, this is the non-AI cost," Vemana added.

Learnings from India's consumer and e-commerce story

While US retail giant Walmart's investment in Flipkart has opened doors for learning in building large retail ecosystems and driving innovation, Target says its learnings from India come through tapping into the country's technology, retail knowledge and talent ecosystem. Vemana cited the example of the company's loyalty leadership team visiting Bengaluru to spend time in the market and learn from other retailers in the ecosystem.

Alluding to the company's overall M&A strategy, Andrea Zimmerman, senior vice president and president, Target in India, said that although the company has undertaken several partnerships and acquisitions in other parts of the US, "That's not been a very specific thing that we've ventured into in India at this point. But that doesn't mean we're not both contributing and taking immense amounts from a learning standpoint," she said.