Why Amazon Might Not Actually Acquire Target
Amazon is always on the march for acquiring new assets to compliment the Amazon ecosystem. 2018 is likely to be no different as it continues to get new assets in its bid to truly dominate the retail industry.
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Amazon is dominating online and it could now have its eyes set on the physical world too. Last year saw their first venture into physical stores with the acquisition of Whole Foods, and now there is talk about Amazon trying to get Target.
Would Target be a good deal for Amazon?
Analyst Gene Munster, co-founder of Loup Ventures, has said that Amazon might likely get Target this 2018. Target does look like a suitable target for Amazon to acquire, and if it does go ahead then it will have much dominance in the retail industry and undoubtedly shake things up again for many businesses.
Target offers more than just food. It has other goods such as clothing, electronics and houseware. It has more outlets than Whole Foods had. These are just some of the things that make it an attractive target for Amazon.
However, Target isn’t a small company either. Amazon will have to pay a hefty price in acquiring the supermarket chain.
For one, Amazon will have to dish out around 3.5 times more than it would in getting Kohl’s. Target has a marketcap of 36.96B while Kohl’s, who they already are working with, is at 9.31B.
Another contender could be Sears. It has a market cap of $410 million with 600 stores.
Sears also has other things such as Kenmore, DieHard and an appliance service network. The downside is that Sears does come with it’s own debt problems and amongst news that they are closing a further 100 stores nationally.
This could be a challenge for Amazon but also could mean a bargain acquisition target. As always though, the deal will still have to go through regulators.
As of now, there is a lot of speculation as to what would be Amazon’s move this year. What is certain is that it will continue to acquire more assets in its bid to be the dominant retailer.
Here at eSellerCafe we personally don’t think a Target acquisition is the best deal for Amazon, and there are better options out there.
What do you think would be Amazon’s possible acquisitions for this year? Let us know in the comments below.
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Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.