Target Corporation, the second-largest discount retailer in the United States, has just announced that it will stop selling Amazon’s Kindle devices in all its stores effective immediately. Target officials have cited a “conflict of interest” as the reason behind the decision, but they haven’t been willing to offer a more comprehensive statement at the moment.
Amazon’s Kindle e-readers and tablets have always been some of the most successful and popular devices on sale at Target stores, which makes this decision even more surprising. On the other hand, financial analysts have predicted for a while that something like this could happen, as Amazon’s Kindle Fire tablet reportedly caused Target and other similar retailers significant financial losses.
The Kindle Fire is tightly integrated with Amazon’s online retail store, which competes with Target’s outlets and its website and therefore steals business from the retailer. “Target is trying to distance themselves from Amazon as much as possible because they recognize they are losing sales to them. “ said Scott Tilghman, an analyst at Caris & Co. in an exclusive statement given to Reuters.
Target is apparently not considering Barnes & Noble as strong a competition as Amazon, because according to official claims, Nook e-readers and tablets will still be sold by the retailer for the time to come. “Nook is much less cannibalistic and Barnes & Noble is not going after Target’s business. “ Tilghman stated, underlining the fact that B&N is mainly focused on selling books, a product category not viewed as essential by Target executives.
Target’s online store has already removed every and any Amazon products sold until now, including the entire line of Kindle e-readers and the Kindle Fire tablet. Also, the retailer’s Kindle-branded online store has been itself discontinued, the website now welcoming you with a “generic application error”.
It remains to be seen how will Target’s decision affect the retailer’s and Amazon’s business in the near future. According to analysts, Target might see a short-term profits drop, while Jeff Bezos’ company should not have the same problem, as its products are still sold by Wal-Mart Stores, Best Buy, and other important retailing chains in the US.
On the other hand, if Target’s decision to “get more serious about Amazon as an enemy rather than a partner” will prove to be beneficial in the long term, other retailers might themselves reach the conclusion that their alliance with Amazon is doing them more financial harm than good.
What do you guys think? Do you agree with Target’s decision to end its longstanding partnership with Amazon? Does this come a bit too late for the company? And finally, which one of the two giants will have more to suffer on account of this “conflict”?