Dive Brief:

• Target has announced that former Amazon supply chain executive Preston Mosier will begin next week as senior vice president of its fulfillment operations. 

• Mosier will oversee Target's direct-to-consumer fulfillment centers, as well as process improvement, customer experience and product management functions related to direct fulfillment. He will report to Target’s executive vice president and chief supply chain and logistics officer Arthur Valdez, also formerly an Amazon supply chain executive.

• Amazon in March challenged Target's Valdez hire in court, citing his non-compete agreement; the two sides have since settled their differences, according to the Minneapolis Star-Tribune. Because Mosier most recently worked at reverse supply chain logistics company Liquidity Services, his move to Target doesn't pose similar issues.

Dive Insight:

This is the second time that Target has turned to a veteran of Amazon, arguably e-commerce’s most efficient mover of goods. Target CEO Brian Cornell has made improvements to the retailer’s supply chain a priority: The company also recently hired Benjamin Cook, former head of logistics and supply chain for Apple (another smooth supply chain operator), as its senior vice president of global logistics, inventory allocation and replenishment. 

Target also has eliminated its two-to-12-day grace period for shipment arrivals, and increased vendor late fees from between 1% and 3% of order value to closer to 5%. Failures to provide complete and accurate product information could incur fines as high as $5,000 to $10,000.

Several experts criticized Target's new approach—which increases the ferocity of penalties without much regard to rewards for timely, effective order fulfillment—as short-sighted. 

Brick-and-mortar shoppers—pre-omnichannel, anyway—move products off the shelves and essentially fulfill their orders themselves. E-commerce, by contrast, is a complex and expensive proposition when it comes to fulfillment, and Target’s moves to boost digital sales have left some shelves empty. Target ended its experiment with curbside pickup earlier this year, and, while it offered few details on the decision, observers say it was likely too expensive and may have kept customers out of stores. 

“Selling on the Internet is expensive... the handling and the postage—and you’re talking about basic goods here where the margins are wafer-thin,” Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive earlier this year, contending that not even Amazon is profitable when it comes to e-commerce.

Mosier has expertise in managing direct-to-consumer delivery, including optimizing last-mile operations and using data and automation to move product more efficiently, according to a Target blog post. During his decade at Amazon, Mosier built direct-delivery capabilities within a growing, large-scale operation. And in four years with Liquidity Services, he was vice president of operations, leading efforts to improve profitability and capacity within supply chain networks for some of the world’s largest technology and retail companies, Target said.

“A top priority for our guests is to get what they ordered quickly, accurately and without hassle,” Valdez said in a statement. “Target already has a strong operation to move product in bulk to stores, so bringing the online fulfillment function under a specialized leader will enhance our direct-to-guest operation. Preston’s experience using technology and data to deliver smaller packages directly to consumers will help us continue building capabilities that will put product in guests’ hands even faster.”