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.

By TheWeek.com May 3, 2012 6:11PM
Image: Target © Bloomberg/Getty ImagesTarget (TGT) announced this week it would stop selling Amazon's (AMZN) Kindle devices, which include the Kindle e-reader, the Kindle Fire tablet computer, and all the Kindle's accompanying accessories.

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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39Comments
May 4, 2012 12:02PM
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What many folks don't understand is the brick and mortar cost more because they pay the employees to help you, they pay local, state and federal taxes, they pay for the building overhead, etc. that Amazon does not have to pay. They keep our friends and neighbors employed and our communities vibrant. Go ahead and buy from Amazon but when you or your friends/neighbors lose their jobs or you don't have a place to go showroming, reflect on what caused it.

May 3, 2012 11:17PM
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Either lots of Target employees here or Apple fanbois giving thumbs down to all the comments.

I've used all of these products.  Most are good in their own right.  I'm not sure why people get so defensive.
May 4, 2012 11:54AM
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What everyone is missing here is that it costs to pay the employees in the brick and mortar, pay the untilities and rent, etc. That is where the extra cost is that Amazon does not have to deal with. By supporting the brinc and mortar, we are keeping our friends and neighbors employed.
May 4, 2012 9:24AM
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Once Amazon has screwed over the brick and mortar stores by undercutting them for so long that they fold up, Amazon will be in trouble. What I don't think Amazon understands is that they NEED all the Targets, Walmarts, and Best Buys. People use the brick and mortar stores to evaluate a product in person and then try to buy it online at a cheaper price from Amazon. If these stores aren't around no one will be able to see the product themselves before purchasing it. 

I'm not sure about everyone else but I would never buy a TV, audio equipment, laptop, or just about most electronics without seeing the product myself first. Great Amazon you beat out all the stores, but now people aren't sure they want to buy a TV through you because no one wants to spend $1,500 dollars on something they haven't seen. That's the whole point of this article Amazon wants you to compare prices. Once there are no stores for Amazon to undercut they'll be in trouble themselves.
May 3, 2012 10:37PM
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This is a mistake by Target.  To be honest with you, I chose to buy my Kindle at Office Depot because I trust the manager there and I buy all of my electronics (digital camera, mp3 player, laptops)  there and I like their warranty.  I went to purchase the kindle at Best Buy and they couldn't answer any of my questions.  As for Apple, I hate their products, I feel that they are overpriced, and quite frankly I am perfectly happy with what I have, I don't want a computer to carry with me, I don't want an iphone, ipod, etc.  I am happy with the basics. 

 

 

May 4, 2012 10:50AM
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I hope everyone keeps in mind that Target gives back to the community. According to the Seattle Times, Amazon gives next to nothing!
May 4, 2012 9:35AM
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Amazon also has the best return policy around.  Buy something without first seeing it then don't like it when it arrives?  No problem, Amazon will take it back.  Instead of crying foul against Amazon who sells for less, cry foul against Best Buy, and the rest of the brick and mortar stores who sell for more.  The mark ups on electronics in Best Buy is ridiculous.  What's happening here is that shoppers are CHOOSING to go to Amazon because they can get the same product for far less. 
May 4, 2012 9:08AM
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Rather physically shop than sit on my **** and wait for it and gain weight and be lazy 
May 4, 2012 10:50AM
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I hope everyone keeps in mind that Target gives back to the community. According to the Seattle Times, Amazon gives next to nothing!
May 4, 2012 1:06PM
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While no one here may care, Target donates to organizations that are against gay/lesbian rights. Just something to think about.
May 4, 2012 12:52AM
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Target is way to high priced on everything, They can not blame the loss of customers on Amazon, because it is their high pricing. I went there looking for a candle and a candle holder, however I did make the purchase I about fell to the floor when one candle and a holder came to almost 30.00 dollars. Needless to say that had been the first time I had been in a target in about a year, realy thinking maybe  have lower pricing. But again same thing a year later. It will be a long time before I shop at target again and no I do not shop at Amazon eigther.
May 4, 2012 9:30AM
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Oh Boo Hoo, I am so sick of folks judging where shoppers shop due to corporate policies, working conditions, etc.  Bottom line is, I shop where the prices are cheapest.  And so do you.  That is quite different than looking for cheaper made products.  Amazon has the best prices hands down.  How they get to that price is not my concern. 
May 4, 2012 7:58AM
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Amazon is at war with all retailers. It's good to see someone knock them down a peg. They have too many friends in our socialistic government.
May 4, 2012 9:55AM
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In Twenty years there will be very few physical retailers left - You heard it here first. It's coming and you can't fight it!
May 4, 2012 10:38AM
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Graham Walker...It was Microsoft that tried to strong arm software companies to wright software that would only work on Microsoft. The Federal Government brought an Anti-trust lawsuit against Microsoft and forced them to allow software from other companies to work on their PC's. Now the precedent has been set, It would be illegal for Apple not to allow MS software to work with their computers. If they did they would be in violation of current Anti-trust laws.
May 4, 2012 10:51AM
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Amazon SUCKS.  They promote credit card fraud through their "a-z guarantee", they violate sales tax laws & Jeff Bezos is a douchebag hack who makes millions off the backs of underpaid and undervalued employees.  

No, I do not work for Target, Best Buy nor am an Apple fanboy.  I have seen Amazon destroy small businesses and now they are getting scared & attacking their main competitors.  You idiot Amazon loyalists do not realize that this is their plan.  Get rid of all their competition, then they will be able to charge how ever much they want for all their products.  You will be paying higher prices, no more free shipping & soon, they will be required to charge sales tax on all purchases.  Then what will we do?  Amazon will go out of business & then we will be forced to buy directly from either Wal-Mart, the Chinese, Japanese, Taiwaneseor& Vietnamese.  

We need to have retail "big-box" stores to prevent Amazon from creating a monopoly.  I don't know about you but I like more choices than just Wal-Mart & Amazon when having to buy something.  I like buying items locally, helping local workers & having the money go back into our communities. 
May 4, 2012 12:41PM
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I see a lot of Amazon bashing here. Amazon is doing the same thing as all of the big box stores, execpt without a local distrubition point. i.e your local store. They buy a product, advertise it and sell it just like Target and Walmart. As ro the comment that they are not paying taxes , they took advantage of a loophole in the tax code JUST like YOU would if you had the chance. The comment that Amazon dosent give back to the community,and they under pay their employees, unless you work for Amazon you do not have any information to go on. Amazon sent TRUCKLOADS of goods to the people of Heneryvill In after the tornado destroyed the town. In every community that Amazon has a footprint the employees there and the localfacilities give back to the community. Now as for underpaying their employees, I worked for Walmart for 7YEARS the last three as a pharmacy tech(one of the highest paid positions in the building). The day I started with AmaZon I was making 40cents more an hour and within 6 months I was making $1 dollar more and hour that at Walmart. After 2 years working at Amazon I am making $3.50 more and have medical coverage for my wife and I. 7years I busted my hump at Walmart and when I quit last September I was only making $11.10 an hour and could not afford insurance, and I could not get full time hours. Don't bash Amazon,you don't know what you are talking about.
May 4, 2012 9:01AM
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Just remember those low prices at Amazon are on the backs of under paid employees who work in appalling conditions. It is better to pay slightly higher prices than to support companies who are turning Americans in to abused slaves. While you are enjoying those low prices you are contributing to the downfall of America.
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