In March 2025, Target set a goal of growing its Target Plus marketplace from about $1 billion in sales to more than $5 billion by 2030. Seven months later, the company cut 1,800 corporate roles, and incoming CEO Michael Fiddelke told employees that the complexity Target had built up over time was holding it back.
When you read those together, the two announcements describe the position most enterprise commerce operations leaders are in this year; Retailers are expected to widen the assortment and drastically cut expenses in the business all within the same planning cycle, usually with just a few ops or commerce teams.
Every ops leader is being asked for both
Gartner’s 2026 priorities outlook names driving commercial growth and controlling costs as the top two priorities for chief supply chain officers. The pressure on the cost side is that fewer than one in five supply chain leaders say they have no plans for cost reduction this year, and direct labor sits among their top targets.
Only about half believe the cost goals they’ve been handed are achievable, and Gartner notes that the C-suite still tends to see supply chain as a cost center rather than a source of growth.
For the people running commerce operations, that adds up to supporting more suppliers, adding more SKUs, and facilitating more orders without adding the people that work has always required. As we covered in our look at the operational ceiling, that workload grows with every supplier a retailer adds.
When both goals can’t be met at once, retailers pick one. This year, the choices have been unusually visible.
Discipline is winning the headlines
To combat this complexity, a wave of retailers are cutting assortment.
Dollar General has removed 1,500 SKUs, Under Armour has cut 25% of its SKUs with plans to cut another 25%, BJ’s Wholesale Club plans to reduce its assortment by roughly 20%, and Lululemon has cut North American SKUs by 15%, according to CNBC.
Most of those cuts are to owned inventory, but the reasoning is operational. As coverage of the trend has noted, fewer products mean fewer suppliers, fewer shipments, and fewer tariff calculations to manage. Each of those retailers decided that a portion of its range cost more to operate than it earned.
Cutting is a legitimate way to protect margin, and it also caps the business at whatever the current operation can carry.
Growth, throttled to what the team can absorb
Other retailers are choosing growth, carefully. JCPenney soft-launched a marketplace in late June 2026, and CEO Michelle Wlazlo said the team was testing vendors in select categories, with about 100 third-party sellers focused mostly on clothing, footwear, and accessories.
A measured rollout is a sensible choice for any new drop ship or marketplace program. It also shows where the limit on that program comes from: the pace of growth is set by how much the operation can absorb, rather than by the size of the opportunity.
When the choice goes all the way
Sometimes discipline wins outright and a retailer walks away from a growth channel entirely. Kroger shut down Kroger Ship, its third-party marketplace, in March 2025.
UK value retailer The Works went further. In March 2026 it stopped selling online altogether, citing a shrinking, loss-making channel and operational problems with two successive third-party fulfillment partners. The company then raised its FY27 profit forecast from £12.7 million to £15 million, reflecting the removal of online losses.
The Works had already handed the work to outside partners, twice, and the channel’s economics still didn’t hold. We’ll look more closely at the in-house versus outsource decision in the next post in this series.
Why the choice keeps coming up
The tradeoff exists because in most commerce operations, cost rises in step with volume. Each new supplier brings onboarding, item setup, daily inventory checks, order tracking, exceptions, and reconciliation. When the cost of supporting one more supplier stays fixed, leaders are left with three levers: add people and accept higher cost, trim the assortment and accept slower growth, or hand the work to a partner and pay for the same volume on an invoice.
Seen that way, growth and discipline are two responses to the same constraint rather than competing strategies. Choosing between them treats a structural problem as a matter of priorities.
The option most planning cycles leave out is changing the relationship between volume and cost, so that adding a supplier doesn’t add a proportional amount of human work. BCG estimates that retailers furthest along with AI could raise productivity by more than 30% and grow while holding headcount steady. That outcome depends far less on any single tool than on how the operation itself is organized.
Questions to bring to your next planning cycle
Before the next round of assortment and budget decisions, it’s worth asking the operations team three things:
- Which supplier or category expansions did we delay or cut this year because of operational capacity rather than customer demand?
- What does it cost, in people and time, to bring one new supplier live today?
- If our supplier count doubled next year, what would have to be true for operations cost to stay flat?
If the honest answer to the last question is “more people,” the growth vs. cost control tradeoff will come back every planning cycle. In the next post, we’ll look at the two models most retailers choose between to carry that work, building it in-house or outsourcing it, and why that choice is the wrong frame.
For a framework on moving commerce operations from manual coordination toward autonomous execution, see our eBook, Autonomous Commerce: The Operator’s Guide to Moving from Manual Coordination to Intelligent Execution.