Industry Analyst Speculates That Amazon Will Buy Target In 2018

Industry Analyst Speculates That Amazon Will Buy Target In 2018

"What they're doing with Whole Foods is a big tip of the hand" indicating that Amazon sees its future as a mix of mostly online and some offline.

It would suggest Amazon believes consumers want to continue shopping in physical stores.

Target's focus on moms is central to Amazon's approach to win wallet share, he added. We don't even know if both companies have even talked about this. "Getting the timing on this is hard, but seeing the value of the combination is easy". Is it gives them not only the demographic that is kind of core to who Amazon is, but also the retail footprint that is important to servicing that 45 percent that eventually will be bought offline.

The analyst is predicting that online shopping giant will make a bid for USA department store Target this year to bolster its retail offering following Amazon's US$13.7 billion acquisition of upmarket grocer Whole Foods in the USA, according to a report today in Bloomberg.

"To put that number in perspective, (Amazon founder) Jeff Bezos alone is worth $100 billion, so he could buy it with a third of his personal wealth", said George John, a marketing professor at the University of Minnesota's Carlson School of Management.

We've reached out to Amazon. "And do you really need a physical store as large as a Target store in order to do this stuff?"

Mr Munster also predicted that United States competition laws would allow the takeover.

"Investors would view this as Amazon taking over the world and that's a good thing", Munster said in an interview on Bloomberg Radio.

Also speaking to Bloomberg, Techonomy CEO David Kirkpatrick said Mr Munster's prediction was "not crazy", but said the political climate made it unlikely.

Whether this interest translated into high sales figures over Christmas is yet to be seen.

In his report, Munster backed his suggestion of Amazon taking over Target by saying the timing will be hard but "seeing the value of the combination is easy".

But this has not stopped Australian retailers getting on the front foot to fend off the threat. In fact, Target is in a transition phase right now, trying to overhaul its business by renovating stores, supply chain improvements and increased promotions, all at an estimated cost of $7 billion over the next 3 years. "It won't be as big as online, but it would be a measurable part" of the Amazon offering, he said.

He said Australian retailers, rather than fearing Amazon's appetite, could submit to it.