Amazon’s Kindle and other gadgets return to Target
August 4, 2016 11:11 AM
(Bloomberg)—Target Corp. has resumed selling Amazon.com Inc.’s tablets and e-readers on its website and plans to bring them back to its stores, marking a detente between one of the world’s largest bricks-and-mortar retailers and its chief online rival.
Amazon’s Kindle e-readers, Fire tablets and Fire TV devices went on sale on Target.com on Thursday, and the merchandise will return to the retailer’s stores in October, just in time for the holiday shopping rush.
When Target stopped carrying the devices in 2012, analysts hailed the ban as a savvy move to rid its stores of a Trojan horse. Amazon’s Fire tablet makes it easier to purchase items on Amazon.com, No. 1 in the Internet Retailer 2016 Top 500 Guide, and its e-readers draw more customers to Amazon’s website, where it sells everything from shoes to shampoo, alongside its electronic books. A few months after Target’s decision, Wal-Mart Stores Inc. (No. 4 in the Top 500) also stopped selling the devices. Some smaller chains, like Best Buy Co. (No. 12) and Bed Bath & Beyond Inc. (No. 67), kept them on shelves.
“Target continually evaluates our assortment to deliver quality products at a great value,” the company said in a statement. “We know our guests love the many aspects of shopping at Target, and believe they will appreciate the convenience and savings of finding these items in our stores and on Target.com.”
A lot has changed for Target (No. 22) and Amazon in the past four years. Target has a new CEO, Brian Cornell, who has refocused the company on its kids, beauty, fashion and baby sections while also introducing new exclusive brands. The retailer’s sales have stabilized and it has revamped its online strategy, expanding its selection and getting more competitive on price. Based on customers’ feedback, the company expects Amazon’s devices to drive traffic to its stores and thinks they could give its lackluster electronics business a boost.
In the past year alone, Amazon has signed up 19 million people for its $99-a-year Prime service that offers free shipping and more, and analysts estimate that about half of U.S. households have a Prime member. That ubiquity means there’s less risk today than four years ago that a Kindle device sold in Target will convert someone into a loyal Amazon shopper.
For Amazon, which has been experimenting with its own stores, the deal with Target gives it 1,800 new showrooms for its products. Amazon has been at a disadvantage to Apple Inc. (No. 2), which has a fleet of sleek stores where customers can touch, feel and try out the latest devices. Amazon, which failed in its attempt to roll out a line of smartphones, sees its tablets as a key way to drive sales of its e-books.