I believe it is tied to their rewards program of some type or a Target credit card.
But yes it does help sell more. If they are keeping track of what people by to target advertising, I'm sure they are measuring the return. An expectant mother seeing car seats in a flyer from Target is going to be more likely to go look for a car seat there than someone who doesn't think about Target having a car seat and orders it off Amazon or else where simply because they didn't think to go look at the car seat section in the store.
1st party data and the customer being receptive (opt-in/looking to see what's in a Target flyer) seem like two advantages that an ad on the internet will never really have. Ad retargeting and such seem like multiple points of contact at best. Ads based on context seem like they could get closer in both ways.
In the context of this article, I would just like to see 3rd party cookie alternatives that do some of this better without tracking.
But yes it does help sell more. If they are keeping track of what people by to target advertising, I'm sure they are measuring the return. An expectant mother seeing car seats in a flyer from Target is going to be more likely to go look for a car seat there than someone who doesn't think about Target having a car seat and orders it off Amazon or else where simply because they didn't think to go look at the car seat section in the store.