Usually the outside hire is a person who doesn't quite fit in an ETL role yet but can prove themselves after an 18 month rotation as an Sr.TL. Qualifications aren't always the deciding factor, it's about how well you interview. My advice: study the ETL questions that are posted within this forum, glassdoor.com, and other websites. Memorize your answers so you know exactly what to say. I was prepared for every question they asked and had an awesome answer for each of them. Also don't be afraid to ask questions during the interview. Research what's going on in the company and show that you are following their progress. If you are already invested in Target at the interview then they may become inclined to be invested in you.
Yes it is possible to go from TM to Sr.TL. Having a degree will be key since you probably can't go off of experience. Even if you have years of experience in retail management and you are currently a TM, they'll wonder why you 1) didn't apply for a management position, or 2) why you settled for a TM position? Just be prepared to impress them at the interviews. Make them feel confident in promoting you to Sr.TL.