Target launches new paid membership program called Target Circle 360. Here's how it works

Target, looking for ways to add sales, is launching a new paid membership program that will offer things like free same-day delivery and more.

The company announced Tuesday that it is relaunching the Target Circle loyalty program, including a new paid version that will launch next month.

“The new Target Circle experience was designed to flex and grow with our guests to deliver more value and ease — no matter how they choose to shop with us — so every visit feels personal, rewarding and made just for you," Cara Sylvester, executive vice president and chief guest experience officer for Target, said in a statement.

Here's what we know.

What is Target's new paid membership?

The loyalty program called Target Circle 360 will give members free same-day delivery on orders over $35 via the company's delivery service Shipt and its more than 100 retail partners. The deliveries will be made in as little as one hour with no fees, the company said. It will also include free two-day shipping and an extra 30 days for returns, in addition to the deals that come with traditional Target Circle.

The current Target Circle program has more than 100 million members. The relaunch comes as Target aims to copy the success of Amazon’s juggernaut Amazon Prime and follow Walmart’s membership program.

How much will it cost?

Target Circle 360 will launch with a special offer for new members for $49 per year from April 7 through May 18.

Target Circle (formerly called Target RedCard) credit cardholders will be able to sign up for Target Circle 360 at $49 per year if they have their card saved to their Target profile, the company said. Customers without a Target Circle Card will pay $99 per year. Cardholders will also be offer an extra 5% offer instantly on top of the Target Circle deals.

In comparison, an Amazon Prime membership costs $15 a month or $139 annually and includes free streaming of its Amazon Video, among other perks. The Walmart Plus program for free shipping costs $12.95 per month or $98 in annual fees.

When does the new membership program start?

Target Circle 360 is slated to launch on April 7.

Is there still a free option?

As for its membership program, Target will continue offering its free-to-join membership with personalized deals, member-exclusive sales throughout the year and additional perks and saving. But new for members: deals will now be applied automatically at checkout so customers don't have to search for or add individual offers. Target said that members of the free Target Circle membership program already shop five times more and spend five times more than non-members.

Why is Target launching the new program?

Target unveiled a series of steps at its annual investors’ meeting Tuesday that aim to rejuvenate sales and traffic. Target will refresh its stores, and over the next decade, the Minneapolis discounter will build more than 300 new stores.

Separately, the Minneapolis-based discounter reported a 58% increase in fourth-quarter profits and handily beat Wall Street expectations as the retailer cut costs and maintained a lean inventory during the critical holiday season.

Revenue rose slightly from a year ago and also topped projections. Comparable sales — those from stores or digital channels operating at least 12 months — slipped 4.4%. But the declines slowed compared with the 4.9% drop in the third quarter and 5.4% drop in the second.

Target offered a cautious outlook on sales and profits.

“This is a unique moment to clarify our roadmap for growth,” Target's CEO Brian Cornell told investors at the meeting in Manhattan.

The investor meeting comes as Target's shoppers remain cautious about spending on discretionary items as they are squeezed by inflation and high borrowing and credit card costs.

Target is more vulnerable than Walmart and other big box discounters. More than half of its annual sales come from discretionary items like toys, fashion and electronic gadgets, things that many Americans have stopped buying.

Target has been trying to strike the right balance between offering good value while also infusing its stores with trendy goods. Last month, the retailer launched a new collection called Dealworthy which features nearly 400 everyday basics starting at less than $1, with most items under $10. They include clothing and accessories, home items and electronics.

At the same time, Target's deal, struck last year, with designer Kendra Scott to offer exclusive collections of earrings, necklaces has resonated with shoppers. So has its new kitchenware brand under the discounter's own label Figmint.

Target has been laser-focused on inventory levels after being burdened with heavily stocked warehouses in the summer of 2022. The inventory glut forced it to discount heavily to clear out those goods.