Oh there is intrigue afoot at Target. It’s like a soap opera! Except it involves a large retailer and electronics so it’s kind of a dull soap opera. The Minneapolis-based store says it will stop selling the Amazon Kindle after two years of doing so. Target will only say that the decision came after a long review of various strategies but it also coincides with the recent announcement that Target will build miniature Apple stores inside existing Target stores. Apple and Amazon are competitors with the Kindle and iPad, more or less. But then again so are Coke and Pepsi and those both get sold. And the Barnes & Noble (& Microsoft?) Nook will still be sold. So what’s going on here? Is this Apple strong arming Target?
No, says the New York Times, it’s just that Target is sick of being a showroom for Amazon:
Like other big retailers, Target has been trying to figure out how to stop Amazon shoppers from visiting Target stores to check out products, and then buy them online from Amazon. It is a practice encouraged by Amazon; over the Christmas holiday, for example, the company offered a promotion on its Price Check app that gave shoppers 5 percent off any item scanned at a store.
Now that retailers like Target are aware of this so-called showrooming, carrying Amazon’s Kindle is a little “like Starbucks selling Dunkin’ Donuts gift certificates,” said Michael Norris, a senior analyst for Simba Information.
Target warned in January that it wouldn’t sit back.
“What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices,” Target executives wrote in a letter to vendors, asking them to think of new pricing and inventory strategies, according to a note that Deborah Weinswig, a Citi analyst, sent to clients.