Amazon Will Buy Target This Year, Gene Munster Predicts
bloomberg.comMaybe so, but from a submission quality perspective we all gain by waiting till these things actually happen. Most don't.
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.
excellent insight - access to CVS would be huge for them
Especially considering this news
https://www.cnbc.com/2017/11/30/amazon-holding-exploratory-t...
There's no way such easy access to prescription drugs could ever go wrong.
> I would also look at all Targets to become order pick-ups for rural and high crime areas.
Except that you are forgetting that WalMart is a more prevalent retailer in those areas.
I wonder how this will effect companies in the same environment like Walgreens and to a lesser scale Express Scripts.
CVS already has their own home delivery which I'm guessing makes this good for both Amazon and CVS.
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.
I agree, I'm saying that Target and Amazon would be an amazing intersection of two great umbrella brands.
"Amazon's goal is to kill off traditional retail"
What makes you think that's their goal?
I always thought their goal was to make piles of money, and that any collateral damage to traditional retail was incidental.
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.
There's a certain sense of irony in Amazon taking part of the old Sears distribution building in Seattle for their physical grocery store.
amazon is sears done right
sears should have been amazon
Seems like it. Because Target is an expensive and nonsensical acquisition for Amazon.
Also, even if it were a real possibility - I really hope not. We don't need more monopolies.
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.
> you can't actually "vote with your dollars"
Sure you can, and you did. You're gripe is that the majority of others don't share your concerns--so you have been, thus far, out voted.
I realize it's all symbolic as you can't actually "vote with your dollars" as the libertarians would have you believe.
"Voting" has never guaranteed that your desired outcome is the one chosen. If it was, it would have to be called something other than "voting".
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. :|
Breakfast pizza. Genuine trigger food of the Gods. I'm glad the Whole Foods next door closed.
That is the only thing people are hold on for this not happening. The politics of this merger is the only thing possibly stopping this.
"Big box stores like Target are failing because their business model can't compete."
most retail sales are made at big box stores. amazon probably wants some of that, yeah?
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.
It seems ridiculous, but that is exactly what they are doing in some stores. Amazon electronics kiosk just before the checkouts:
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!)
I noticed the kiosk was there one week and gone the next. It did feel totally out of place.
Amazon is following the path of Sears which started of as a delivery based store and then ended up with a physical store network.
If their goal is to kill traditional retail, why are they opening traditional retail book stores across America?
Target is failing? That is news to me.
You should read about "Target Canada". What a fiasco money-fire that was.
They are closing some stores. Retail in general has had a very bad few years.
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.
> Amazon's goal is to kill off traditional retail, as far as I can tell.
Then why are they opening up bookstores?
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.
Amazon goal is to out compete other retail not to kill offline retail. If it will sell through physical stores if it needs to compete.
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.
Costco would be almost 3 times the cost, using market cap as a basis.
Much less coverage as well. Not to mention different philosophies.
i want this just to see how the company cultures would clash...
That's a good point. They treat their retail/warehouse employees very differently.
And considering Costco's international presence and their emphasis on employee treatment, I doubt they'd even consider selling to Amazon.
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.
what's with all these analysts predicting mega mergers today?
> "Citi analysts see 40% chance Apple will buy Netflix"
Yeah, right. It's baseless cable news headline-bait garbage.
Could it be trial balloons? see how regulators and politicians react to gauge how likely it is to succeed or if there is a big pushback?
The tax law changes are going to liberate billions of dollars stuck overseas. They need to chase returns with that money.
We’re heading into a historic cycle of mergers.
1. Buy stock/derivatives in a large company that could plausibly purchase another large company.
2. Announce rumours of merger/acquisition.
3. Stock price rises, sell stock/derivatives at a profit.
Umm, isn't that highly illegal? If you make a good profit and it can be traced to your rumor, I don't think the SEC finds that very funny.
True, but as you can see from SEC's stance of pump and dump schemes on altcoins, there are ways of blurring the lines of legality.
I am also under the impression not many people get caught doing a pump and dump.
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.
Yeah, IANAL, but that sounds like a textbook pump-and-dump.
This is exactly what Jim Cramer did
I actually think an Apple/Netflix merger makes a lot of sense. Apple sucks at online services and netflix could use the deep pockets.
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.
That's exactly why this doesn't make sense for Netflix. They'd be much better off without Apple.Apple sucks at online servicesI 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.
There's no reason that Apple couldn't build a Netflix competitor and then ban Netflix from its mobile device platforms.
Other than the fact that every attempt apple has made at a cloud service has been terrible.
Am I wrong, or are iCloud and Apple Music both better than terrible cloud services?
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.
Apple Music is my favorite. I like being able to buy things not included in streaming on iTunes or rip music from other sources and have it integrate into the ui. Last time I checked spotify is missing a clean way to integrate music it's streaming service is missing.
iCloud seems to be on par or better than one drive. I'm not sure who else is it's competitor. Dropbox has better syncing with multiple users and g-suite has better online editing and sharing tools. Their core stories is different than iCloud's, which is a online backup of personal documents. Maybe Google Drive has good desktop apps and works for Android users.
And that would be the day I switch to Samsung.
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.
I thought the Apple acquires Netflix rumor was old. They were also looking at acquiring Disney and some others as well, according to the rumor.
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.
Black Mirror Season 4: maybe a spoiler?
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.
Slow news day.
It is the first real news day since the holiday.
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.
Here's what they currently do https://www.amazon.com/produce-aisle-Fuji-Apple-Large/dp/B00...
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.
Just in case you want to buy another! /s
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.
How is that different from Whole Foods?
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)
> And I've never seen a Whole Foods next to a Target
I've seen a couple places where they are in reasonably close proximity in Northern California; that can't be unique.
Whole Foods is a high end grocery store and Target is a retail store?
Grocery is a subset of retail; they are both retail stores.
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.
I replied to another comment, but this reality is already here: https://twitter.com/alexhillman/status/947593851715424256
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.
(http://www.businessinsider.com/store-closures-in-2018-will-e...) (https://www.usatoday.com/story/money/2017/12/20/here-26-reta...)
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.
This prediction is as accurate as "Apple Will Buy Netflix This Year".
It makes sense in a way.
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.
Maybe then I'll get to use ApplePay at Target.
If it takes drones to make brick and mortar restrooms not excessively laden with feces... then i welcome our new masters
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.
Didn't we hear something about this already last year?