Target Has a New Idea for For Spotting Trends: It’s Asking AI.

Target is trying a new trick for tapping trends: asking AI.

The retailer is involving artificial intelligence in merchandising and marketing decisions as it tries to recapture its reputation for affordable-but-fashionable finds. Staff are using Target Trend Brain—an internal generative AI tool—to predict and respond to fads, Target (TGT) CEO Michael Fiddelke said on a conference call Wednesday.

It’s also testing products and promotions on “synthetic audiences” to simulate how various consumers would respond to them, he said.

“By leveraging AI to capture color, material, style and product details [and] applying consumer research and our brand principles, we can deliver unique and on-trend products to our guests faster than ever before,” Fiddelke said, according to a transcript made available by AlphaSense. 

Target thinks it will further speed up the process by keeping corporate teams lean. Fiddelke said Target’s 1,800 corporate layoffs in October were about streamlining workflow, not cutting costs.

The Minneapolis-based retailer has been contending with sluggish sales and falling foot traffic in recent quarters. Its stock has also taken a hit: It was recently down 2% in Wednesday trading to put its 2025 decline at nearly 36%.

Disorderly stores, out-of-stock staples and uninspiring merchandise are part of the problem, Target executives said. Concern about the job market and inflation are also at play, they said. The company on Wednesday announced price cuts on thousands of items.

Besides using technology to spice up its inventory, Target is taking steps to address issues in its stores. Delivery fulfillment will be concentrated in stores with less foot traffic to ensure busier locations have the bandwidth to focus on customers, Fiddelke said. New technology should prevent stores from running out of popular items and reduce time spent on backroom tasks like unloading trucks, he said.

Target reported $1.51 in earnings per share on $25.3 billion in sales, a 1.5% revenue drop from last year. Comparable-store sales fell 3.8% year-over-year, but digital sales rose 2.4% thanks to the popularity of same-day delivery, the company said. The results were in-line with the retailer’s expectations.

Target shifted its earnings outlook to the bottom of its prior guidance for the fourth quarter, citing poor consumer sentiment and volatility in the industry.

“We don’t have a perfect crystal ball for exactly how it’s going [to] play out by day or by week,” Fiddelke said. “But the thing we feel really good about is how we’ll show up for the guests.”