Target Throws Kindles Into the Brush Pile
Target has decided to dump all Amazon Kindle merchandise from its shelves. The move may be a reaction to Amazon's rocky relationship with brick and mortar retailers. The Kindle Fire in particular is designed to encourage users to buy not just digital media but also physical goods from Amazon. For Target to sell Kindles "is like Target selling products that push people to Sears," said analyst Rob Enderle.
May 2, 2012 2:29 PM PT
Target has decided to stop selling anything carrying the Amazon and Kindle brands.
"We still have some of the product in our stores, and we expect they'll be sold by the end of May," Target spokesperson Molly Snyder told the E-Commerce Times.
There's been some speculation that this move is tied in with Apple's plans to open mini-stores in select Target retail locations, but Snyder dismissed that possibility. "We have an ongoing process, we focus on the best quality and the best product for our customers," she said.
Snyder declined to specify when Apple will open its mini-stores in Target locations, or how many would be opened and at which stores. "We don't comment on negotiations with vendors and partners," she said.
Neither Amazon nor Apple responded to our requests for comment for this story.
Target's Likes and Dislikes
Although Target will get rid of Amazon- and Kindle-branded products, it will continue to offer other e-readers and supporting accessories, including the Barnes & Noble Nook e-reader, according to reports.
Snyder declined to discuss this or state whether the retail chain would continue to carry Android and Windows tablets. However, the statement that Target is focusing on the best quality and products has raised doubts.
"I haven't heard about consumers having any bad experience with the Kindle," Michael Morgan, a senior analyst at ABI Research, told the E-Commerce Times. "I'm still trying to figure out the true motive for this move."
Who Stirred Things Up?
Speculation that Apple leaned on Target to get rid of a potential competitor is making the rounds, but it might be off the mark.
"I find it funny that everyone's blaming Apple here," Carl Howe, a vice president at the Yankee Group, told the E-Commerce Times. "This is just as likely to be because of a falling out with Amazon. After the holiday shopping season when Amazon was actively giving consumers incentives to shop in stores and order online, [it] hasn't exactly been the best partner for brick-and-mortar retailers."
Apple isn't likely to be the villain because "they really don't have to worry about the Kindle, and they've said the Kindle doesn't compete directly with them," ABI's Morgan suggested.
Every Sale Is a Battle
It could be that Target was not happy about selling Kindles because "the Kindle is set up to get consumers to buy stuff from Amazon through it," ABI's Morgan speculated. "So when you sell one to a customer, that customer may not come back to you to make another purchase, he'll buy off Amazon."
For Target to sell Kindles "is like Target selling products that push people to Sears," Rob Enderle, principal analyst at the Enderle Group, remarked. The Kindle Fire "is a retail front end for Amazon, and Amazon is a direct competitor to Target, with lots of product overlap," he told the E-Commerce Times.
Target might continue offering tablets and e-readers from other companies because "other tablets aren't as hard-wired to competitors as the Kindle Fire is," Enderle remarked.
Amazon Sells Everything, but Who Will Sell Amazon?
The loss of Target might signal a new reality for Amazon.com, whose strategy of keeping prices down has riled up retailers.
"The bigger issue is whether other retailers will now follow suit," Enderle said. "Amazon can easily survive losing Target, but other retailers may come to the same conclusion now and that could be very painful."
Bookstores are one example of retailer angst, the Yankee Group's Howe said. "Consumers may be happy with Amazon's prices, but stores that have to maintain physical book inventories and yet match Amazon's aggressive pricing aren't thrilled."
Amazon "is likely going to have to push hardware online because they're losing physical store shelf space," Enderle opined. "They might think of opening Amazon storefronts in malls to pick up impulse buyers."