Credit has to be given where it’s due — Target Corporation (NYSE:TGT) is at least doing something to fend off the ever-expanding invasion of Amazon.com, Inc. (NASDAQ:AMZN) onto its turf and is at least trying to keep bigger rival Wal-Mart Stores Inc (NYSE:WMT) in check. A word of caution to owners of TGT stock that are excited about the retailer’s most recent initiatives, though — they won’t be cheap.

Target’s bottom line is certain to take a hit and though it currently looks like Target stock is working on a fundamentally-driven recovery, reality could easily pull the rug out from underneath the effort.

Higher Wages, Lower Prices in the Cards

The 20% advance TGT stock has dished out since the middle of this year more or less says that Wall Street has renewed faith in the company. The ill effects of a controversial bathroom-usage policy, losing its way from a merchandising standpoint and the lingering impact of 2013’s data breach that exposed the credit card data of 40 million shoppers took a toll, but Target’s second-quarter numbers from August suggest the worst is in the rear-view mirror.

That doesn’t inherently mean the future is going to be good, however.

First and perhaps foremost, Target will be slashing prices on thousands of skus. To what extent remains to be seen, though the retailer made a point of mentioning that the price cuts would apply to plenty of consumer staples items.

Calling a spade a spade, the lower-price strategy is a response to the decision from new Whole Foods owner Amazon to lower prices on many of its goods as well. Wal-Mart, which sells groceries as well as general merchandise, countered, leaving Target Corporation little choice but to do the same. The cost to TGT of these lower prices isn’t yet fully known, but most observers expect the relative cost of goods sold for Target to edge noticeably higher than the current level of 73% of the company’s sales. Wal-Mart, for perspective, spends 74% of its revenue just buying the goods it sells.

The second initiative Target is taking on is upping its minimum hourly wage to $11, starting this month, en route to a minimum of $15 per hour by 2020.

There’s a tangible upside for owners of TGT stock relating to this decision, mainly in that a clear connection has been drawn between successful retailing and above-average pay rates.

Take Costco Wholesale Corporation (NASDAQ:COST), for instance. It made a bold decision years ago to pay its people far better than the going rate for retail workers. Yet, Costco stock has remained as reliably profitable as its rivals, ultimately because it’s getting higher quality workers that are not only more engaged, but don’t have to be replaced as often as they might need to be at Wal-Mart or Target.

Investors may also recall Wal-Mart’s similar initiative back in 2015 and then again in February of last year. When WMT’s internal minimum wage was upped from $9 per hour to $10 by the middle of last year, investors initially lamented that the move siphoned off company profits. However, as the retailer got better at leveraging its superior pay and slowing down the revolving door of employees (thus reducing retraining costs), the company and its investors started seeing the financial benefit of better pay for its workers.

There’s the potential rub, at least initially, for Target, though. While paying employees a higher wage sets the stage for a more engaged employee base that, in turn, provides a better in-store shopping experience, Target will inevitably go through a learning curve reach this proverbial promised land. And, of course, there’s no assurance it will do so — and there’s no timeline either. The initiative might just end up being an expensive experiment.

Bottom Line on TGT Stock

None of this is to suggest Target won’t be better off in the long run by spending more money or accepting less revenue. Indeed, if the company is going to remain competitive with Wal-Mart and Amazon.com, it absolutely has to be willing to do what its competition is doing.

These two items are particularly noteworthy, however, simply because of their scope and impact. In a sense, the company is going for broke. The core question from here is: How will Target manage these initiatives to ensure itself an acceptable return on its investment?

Simply investing more in workers’ wages is only a start. Is TGT going to make a point of retaining workers by offering growth opportunities? Or is it simply going to cut hours to offset higher pay, thereby making the shopping and working experiences worse rather than better?

In other words, it’s up to Target as to whether or not these big things are true investments or just added costs built on a wish.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.