Is Target going to war against Amazon?
The retail giant is dumping Kindle products in the latest round of an increasingly bitter battle between the online retailer and brick-and-mortar stores.
Target is reportedly dropping the Kindle over a cryptic "conflict of interest," but the big-box retailer will continue to carry Barnes & Noble's (BKS) Nook e-reader and Apple's (AAPL) iPad. The seemingly aggressive move has fueled speculation that Target is targeting Amazon, which has emerged as an existential threat to physical retailers.
Is Target at war with Amazon?
Yes. Amazon has been stealing Target's customers: Amazon has been actively encouraging customers to comparison-shop at brick-and-mortar stores like Target, then buy the same products at a discount online, says Brad Tuttle at Time. The practice, known as showrooming, is wounding big-box retailers. Last holiday season, Amazon was even "offering special discounts to shoppers" at Target and elsewhere "who used Amazon's Price Check app for showrooming purposes." Target's message to Amazon is simple: "You undercut our prices and try to steal our customers, and we're not going to sell your products."
Apple, Target's new partner, is also at war with Amazon: "Apple and Amazon are bitter rivals," and Apple is planning on opening mini-stores in 25 Target locations this year, says Dan Mitchell at CNN. "It's quite possible that Target is getting rid of the Kindle to appease Apple," which recently accused Amazon of holding a "monopolistic grip" over the e-book market in a lawsuit over the industry's pricing practices.
Either way, Amazon's Kindle will be just fine: The controversy is probably no skin off Amazon's back, say Stephanie Clifford and Julie Bosman at The New York Times. Target's decision will likely "have little effect on Kindle sales," given that the Kindle will continue to be sold at Staples (SPLS), Best Buy (BBY), and Wal-Mart (WMT). Furthermore, it certainly "won't stop Amazon shoppers from checking out other products at Target," and its showrooming problems will continue.
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