Brian Cornell: Mike, when we actually lead this project, we spent a lot of time thinking about the guardrails. Now obviously, there’s big opportunities that we want to capture. But there’s also things we never want to compromise. Do you want to talk about the opportunities versus the guardrail who say, “We’ll never head in this direction?
Michael O’Neil: Yes, I think that’s a really important question. And the things we’re not willing to sacrifice start with a team member and the guest experience. We’re not going to take away anything given the investments we’ve made in our team over the last couple of years, and spending that time in human resources during those early days of the pandemic had an appreciation for all our team did to run our business and to serve our guests. And so I look at our team members and the investments we make as an investment and the best team in retail. Similarly, on the guest side, our shopping experience is a key differentiator for Target, and we’re not looking at anything to take away from that. In fact, our guiding principle around this work is, how do you make it easier for our team members to run our business and in doing so, deliver a great guest experience? And so we do that, we think we’ll see benefits to both the team and our guests.
Michael Fiddelke: Mike, since we first announced this work, I’ve had a bunch of investors ask me where they should expect to see the results of this work show up in the P&L? Can you share your initial thoughts?
Michael O’Neil: Sure. I think it’s — you’re going to see it across the full P&L. So I’m not sure you’re going to be isolated to one single component. What excites me about this work, though, as we think about running the different scale, I think there’s top line opportunity. And so it’s going to start with sales. Now we’re not going to do anything against — we’re going to continue to invest in our team, but any efficiency work will have SG&A path and SG&A line. And product costs continue to be our biggest line item on the P&L. So we’ll see it there as well. But I also say to expand beyond the P&L as we look to be more efficient in our CapEx.
Brian Cornell: So Mike, I know you’re still in the early stages of scoping the work, but there’s also things that we’ve been working on for quite some time now that we can build on. Do you want to highlight some of those?
Michael O’Neil: Sure. We touched base on this morning that work around digital fulfillment, I think, is a great example. We’ve been — that work in several years underway. When you think about our stores as hub model, has significantly decreased our fulfilment cost. John mentioned 40% over 3 years. We’ve also been able to increase speed of delivery and improved the guest experience across all those different nodes, whether that’s ship to home, Drive-Up, order pickup or ship delivery, and it’s extremely capital efficient. If you look forward now, we think there’s hundreds of million dollars to continue to unlock with our investment in sortation centers. That’s a business — that’s a capability that’s been on our road map for a few years now, but requires scale and density at the market level to unlock.
And given the growth over the last 3 years, we now have that. And so we think there’s opportunity in a dozen of metro markets. We already have 9 facilities out there and plan to have a total of 15 by 2026. And so we’ll open those up, but also we’ll make those centers more efficient as well as we think about streamlining processes in them and looking to introduce automation and technology.
Michael Fiddelke: Thanks, Mike. Can you also provide an example of a newer effort you’re excited about?
