US retailer Target is deepening its AI adoption even as shifting pricing models from AI providers are forcing a strategic reassessment, according to the company’s India president.
Speaking at a Reuters summit in Bengaluru, Karnataka, Andrea Zimmerman said the retailer is moving from “using AI to running on AI,” but that usage-based pricing now being adopted by companies such as Anthropic and OpenAI is complicating planning.
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Zimmerman was quoted as saying: “It is forcing us to re-evaluate our strategy.”
She noted that pricing conversations are now taking place “at the highest level in both our architecture forums, as well as in our senior leadership forums within technology”.
The company is also committing “significant investments” to ensure its teams have access to appropriate tools.
Separately, Target is seeking to strengthen its analytics capabilities in India.
The retailer’s Bengaluru global capability centre, which spans merchandising, digital, stores and supply chain functions, employs around 5,600 people.
Under chief executive Michael Fiddelke, the company intends to direct an additional $2bn this year towards new stores, refurbishments and AI projects.
The news follows a stronger-than-expected trading update earlier this month, in which Target lifted its full-year net sales growth outlook after reporting a 6.7% year-on-year rise in first-quarter net sales to $25.44bn.
The company now anticipates net sales growth of around 4% for 2026 against 2025 levels — two percentage points above its previous guidance range.
Full-year operating income margin is expected to close more than 20 basis points above the adjusted operating income margin rate of 4.6% recorded in 2025.
Also this month, Target named Jeff England as executive vice president and chief global supply chain and logistics officer, effective 31 May.
England will report to chief operating officer Lisa Roath and will oversee the retailer’s supply chain agenda.
