This actually gives Amazon a backdoor entrance to CVS/Caremark medication distribution. You see CVS has been slowing down building new free standing locations because they've taken over all of Target's pharmacy.
If Amazon does actually buy Target I would look at CVS start delivering prescriptions and equipment directly to homes via Amazon's distribution system. This is yet another reason not to go to a competitor.
I would also look at all Targets to become order pick-ups for rural and high crime areas.
Damn! That's a pretty big detail! There was talk a while back of Amazon getting into the pharmacy biz anyway. I wonder if that wouldn't be more draw to make this deal happen.
It's a shame because CVS is horrendously expensive and Target wasn't. It used to be that Target, Walmart, and Kroger all tied for the cheapest generics where I live. Other supermarkets were slightly more expensive, and CVS and Walgreens are colossal ripoffs. Now Target has dumped their pharmacies on CVS, and Kroger raised their prices (but not to the extreme levels of CVS and Walgreens). Walmart is the only cheap pharmacy left, and they'll have my business for life.
CVS also has horrendous customer service issues. A few months ago, Walmart ran out of one of the several medications I take, and after the shortage lasted long enough, I had my doctor transfer just that script to CVS. It was hell. I was constantly innundated by calls from CVS daily telling me it was time to refill my prescription. Even if I just refilled it, I would start getting the calls a few days after I picked it up. I'm a little bit disappointed in my doctor for even giving my phone number to these people (Walmart doesn't have my phone number and never asked for it).
I had to call CVS corporate several times to get them to stop calling me every day. The first couple of times, they told me they took my number off, and it was a blatant lie. The last time I called, they said they took my number off their list again, but when I asked them to confirm that my phone number had been completely removed from all my records, they said they couldn't do that. I had to straight-up lie to them. I told them I'd just sold my phone, my SIM card, and the username and password to my account with my carrier to some rando on Craigslist (and I'm fairly sure that selling this is illegal, but keep in mind that I was lying through my teeth when I said I did this), so my number is no longer mine, and if they call that number and divulge anything about my prescriptions, they'll be committing a HIPAA violation. That got them to change my phone number to (000) 000-0000. And now every time I pick up my prescription from them, their credit card terminal makes me click through a whole bunch of screens complaining that my phone number is invalid. Fortunately I only have one med with them, and the rest are still with Walmart.
I hate CVS, and the next time I see my doctor, I'm going to have him call Walmart to see if they're stocking the medication again so I can kick CVS to the curb.
Amazon partnering with CVS just means I won't have any interest in moving my meds over to them.
For what purpose? Amazon's goal is to kill off traditional retail, as far as I can tell. Big box stores like Target are failing because their business model can't compete.
Amazon already bought Whole Foods, which gives them a large enough physical presence to do whatever it is they're going to do with it. Integrating that business with the rest of Amazon will already take years- why complicate it further?
My guess? Gene Munster owns some stocks in Target and wants to offload them at a price slightly higher than what it's currently at.
I disagree - their goal isn't to kill off traditional retail. Their goal is to get a cut of every transaction you make AND remove as much friction from the purchase as possible - wherever you make it...it makes perfect sense that Amazon would buy up a chain with lots of local presence.
Sure, that's their ultimate goal, but currently, at this stage of this game, isnt it better to spend much less than $41B, on just curbside check out points(which is the future, probably), create a curbside war between retailers(already started), and in the process bankrupt traditional remailers and shift user behaviour to online, and later, buy some retailers for pennies on the dollar?
Amazon wouldn’t have brought Wholefoods if according to your logic. They can use Targets physical location to cover a lot of last mile delivery or more products to have those 2 hour deliveries.
There are many products at Target that are simply inferior and more expensive than their alternatives on Amazon.
If target could more intelligently replace those inferior and pricier products with their cheaper, Amazon-based alternative, then Target would provide a more competitive buying experience.
But Target is locked in with old brands and not necessarily the best ones in the market for their given vertical.
Seems like an extremely simple fix, but maybe Target is mired in longer term contracts with big brands that they can't break.
As a quick example, is Bic still the best manufacturer of the best available pens?
When I lived in a smaller suburban town Target was a great responsibly priced alternative to Amazon for many things, especially consumables like cleaning supplies. Now that I lie in a busy city its not worth the horribly busy parking, checkout lines and crowds to go to Target. If I could simply order everything from Amazon I would. If Target sold better quality I still wouldn't go. Prime Now seems to be improving but the selection is pretty spotty.
> There are many products at Target that are simply inferior and more expensive than their alternatives on Amazon.
And there are many products on Amazon that are fake. At least I know what I'm getting at Target, and returns don't involve negotiating for a shipping label and figuring out where there's a package drop-off nearby.
> As a quick example, is Bic still the best manufacturer of the best available pens?
Probably not, but luckily they're not the only brands that Target carries in-store: Paper Mate, Pilot, BIC, NPW, Pentel, Staedtler, Sugar Rush, Uniball, up&up, Write Dudes, and Yoobi are all advertised as pen brands sold by Target.
Everything is cyclical. You went from the Mainframes to PC era and not back to cloud computing (main frames). Amazon is kind of like sears.It started out as a catalog and then open retail store.
I stopped shopping at Wal-Mart back around 2009 and stopped buying from Amazon around 2012. I don't like support those models and I hate how so much in the tech world is dependent on Amazon. There should be more providers people are willing to use.
It saddened me when Amazon absorbed Whole Foods. I still shop there because I like the breakfast bar, and there's a limit on what we can actually do as consumers. I realize it's all symbolic as you can't actually "vote with your dollars" as the libertarians would have you believe.
But still, I hope this is all Munster vaporware blowing out his ass. I'm sure there'd be serious FTC issues with a merger that large. Then again, the FCC did just ditch network neutrality and both companies are large enough they can probably lobby whoever they want to make such a transaction go through.
I mean technically you can vote with your dollars. It's just the really rich people who outvoted us with their dollars because they have more of it. :|
Amazon already bought Whole Foods, which gives them a large enough physical presence to do whatever it is they're going to do with it.
Let me think about picking up consumer electronics from Whole Foods...Nah! Don't like it. Doesn't work for me as a consumer from a branding perspective. Picking those up from Target? Sure! The branding work there has already been done.
Okay. So look at the pictures and think about that vs. Target. Which do you prefer? (Not rhetorical. What are your impressions? 3rd party readers/lurkers please chime in!)
Target has some problems, but they're mostly debt management stemming from aggressive expansion. Closing a dozen stores out of 1,800 doesn't really say much. That's just churn.
Walmart is Amazon's largest competitor in retail and they have a big footprint. I think buying Target makes sense because they get access to more products (and store branded products) as well as local distribution which may help reduce shipping costs.
If Amazon is going to make a high dollar retail acquisition, I think Costco makes a lot more sense than Target. True warehouse stores that could be used for distribution, high income customers who don't mind paying a subscription fee and it is already headquartered in the Seattle area.
That's not how it works with public companies. Management can refuse an offer, but the shareholders are the ones who really get to decide and Costco is majority owned by institutional investors. If the numbers look good there is nothing management can do.
I'm not an expert at this! But it would seem a fairly straightforward way to profit without directly trafficking in securities linked to either purchaser or acquirer would be to instead use related company securities instead.
Ex: rumor is Amazon will buy Target. Buy securities on a basket of retail, ex-Target, with similarities to Target.
An Apple/Netflix merger makes little sense; Apple is pretty clearly not interested in online services not tied into it's hardware platforms, and it's already got a video service tied into it's ecosystem.
I suppose making Netflix's existing original content Apple-exclusive would have some value to Apple, but not enough to justify purchasing Netflix.
I always got the impression that Netflix's pockets were large anyway. I mean, a huge portion of their content has become self produced and the content is better than a lot of B level movies that I've seen. I assumed funding themselves making bad ass content was an indication that they had enough money that they were just like "Fine. We'll make it ourselves." Kind of along the same vein as PornHub being rumored to make sense8 season 3.
I am not purporting to have any knowledge that was just always my assumption.
I would say you are wrong. I have used both and the experience was always worse compared to that of competitors, despite their advantage of
a) deep hardware integration
b) deep platform integration (so much, that it feels like effort is required to not use the services).
I guess it depends on what your bar is for “better than terrible”, but when I look at the richest company in tech that also happens to own the entire stack in play, then “better than terrible” is not remotely good enough.
Yeah because Samsung is known for a free and open platform. Honestly I bought an S8+ in March and I don't think I'll be getting another Samsung device. They make their own apps for so much there are issues getting their phones to work with things built for Android. I have a car that supports Android Auto and it worked fantastically when I had my Nexus 6p but it has been unreliable and I don't use it anymore thanks to my Samsung device.
The "Apple buys Disney" seemed more like people just dreaming up what they would do with umpteen trillion dollars and making a blog post out of it.
Apple buying Netflix makes slightly more sense given that their own streaming video offerings are not exactly taking the world by storm. I have no idea what they would do with Netflix after they bought them though. Apple's STB offerings already have a Netflix app I'm sure.
They could let them keep doing they're thing as they seem to be a company that seems to know how to run themselves, also Netflix could provide a massive amount of 'free' product placement for apple products.
Like every Netflix show now has the main characters wearing iWatches and talking on the iPhones?
I'm also not sold on "We bought you out, now keep doing what you were doing before." What's the point of spending all of that money if you're not going to meddle? Netflix's paltry profits can't be all that enticing to Apple.
In season 4 of Black Mirror, every branded piece of tech was Apple. That's just an example. There was an instance where the Apple logo was featured fully on the screen for a fraction of a second. An entire episode leveraged the creepy factor of Boston Dynamics. This obviously an extreme example but imagine every Netflix show is wall to wall Apple products. In the age of chord cutters this becomes a rather powerful tool to have.
I was in Whole Foods yesterday and was half-expecting to see USB cables for sale between the tomatoes and the oranges—the real-world version of Amazon's product recommendations... :)
But then that got me thinking that Whole Foods just might be their first foray into retail and I could see them making other retail acquisitions in various niches to eventually cover a wide spectrum of goods.
Target seems more questionable as this would duplicate the logistic systems they already have.
I think the real-world version of Amazon’s product recommendations would be a man offering you 30 more varieties of apples after you put a Fuji in your basket.
That seems to be standard with automated product recommendations. I recently purchased a coffee maker for my girlfriend. My Facebook account has become linked my credit card account, somehow, so Facebook has started showing me advertisements for the manufacturer of the coffee maker. There are at least a few faulty assumptions at work there.
Always thought those types of ads were odd. I just bought the item you're advertising to me--and in most cases, why would I buy another one so soon?
In your case, I'm surprised it's not smart enough to say coffee maker purchased, how about we show some coffee bean ads? (And even in that case, you might make the argument that it'd be a second gift for your girlfriend.)
Target has real-estate, they've done all the legwork to figure out where big stores like that need to be. Everything is already built, Amazon just needs to put their logo on it. Voila - digital empire turned physical overnight.
Whole foods has ~470 stores in North America and the UK, Target has ~1,800 worldwide. And I've never seen a Whole Foods next to a Target. Amazon just quadrupled their real estate footprint!
The Whole Foods flagship store in Boulder directly faces a SuperTarget.
(Also faces the big new Google office. Shopping in a store owned by Amazon with that staring at you was kinda surreal the first few days after the acquisition)
Yes but I wouldn't go to Whole Foods if I was looking to buy a radio. Therefore, expanding to Target would offer more variety than Whole Foods would. That was the point of difference that I saw. Sure if I go to target they have groceries but they're a different type of grocery (as I said initially.. Whole Foods is high end) plus, as I stated, you wouldn't go to Whole Foods if you were looking to buy a camera or a radio or an xbox.
Typical click-bait; An extremely bold prediction with an article that takes less than two minutes to read with a re-direct to another Bloomberg article about a less-sexy potential Amazon acquisition.
I don't know anything about retail but I'd have thought they were more likely to buy Kohls: Target seems pretty successful at what they do hence expensive, while Kohls seems sort of directionless but they have stores most places. They also have an arrangement already with Amazon for BnM returns.
Gene Munster clearly does not understand how Amazon works. They dominate on efficiency which comes with scale. I do not think they want to the brick and mortar route, but could be wrong.
His analysis is flawed unless they can pick up Target cheaper than they would be able to custom fit/design their own stores.
I think they would want to own the least amount possible, but they may use stores as storage units if they decide to get into the logistics game.
The Commercial Real Estate in the Retail sector is getting whacked.
(In english, it is getting cheap as real estate owners are willing to accept less rather than let a huge building go vacant and receive no income.) With that being said, they will drop a tenant if the likes of Amazon came knocking. The only issue is the leverage that Amazon has may or may not be beneficial for the owner of the real estate.
With interest rates rising in the U.S, it will put more pressure on the retail sector for those whose leases are tied to expensive financing and did not lock in lease/rates.
With all this being said, I see this as very unlikely.
Retail is very similar to record companies or the movie industry. They've failed to innovate solely because they got lazy. They took for granted their position in the market.
A good position too. I mean, if you make believe the internet isn't a threat, which top business people most likely did, then I can easily see brick-and-mortar-rules-all mentality lulling top execs to sleep. Meanwhile, Amazon etc took over from a completely different angle, utilizing on-demand and internet tech.
An acquisition from traditional retailers may be appealing.
This has been going around the Minneapolis subreddit and development forums in the last week or so, with a lot of doom and gloom about one of our biggest HQs moving out of the city.
I guess I could see why Amazon would want to do it, but I'm also a little torn on what it would do locally if Amazon didn't end up locating HQ2 here while pulling Target HQ somewhere else.
On the other hand, Loup Ventures is also based here, and I wouldn't be surprised if this is just Gene Munster trying to get press by stirring up shit.
I'd expect someone other than Amazon to buy Target (if anyone does), and stories like this will make the price seem more justifiable as a defensive move.
Having spent a terrible summer working at Target as a cart attendant, I can explain at least part of the reason why their restrooms are gross. The job of cleaning the restrooms, as well as every other awful job that nobody wants to do, is given to "cart attendants", who applied thinking they'll just be pushing carts around all day and don't find out about these "side tasks" until their first day on the job. So these side tasks often go neglected out of spite and a lack of willingness to deal with that crap (figuratively and literally) for just above minimum wage. Why a gigantic store like a Super Target wouldn't hire a separate person as a "custodian" or "janitor" for such things is beyond me.
My experience with Target restrooms has been mostly positive. They also tend to be easily visible, near the entrance and signed, unlike many other big box stores where you have to ask someone because its impossible to find the restroom.