Monday, June 13, 2016

AMAZON IS TARGETING TARGET. IS ANY RETAILER SAFE?

Amazon Prime’s next target customer is the Target customer

Target has a supply problem. The discount retailer has too much unsold merchandise on its shelves, and hasn’t figured out how to get all of it to customers quickly. To make matters worse, a new survey shows that two in five Target shoppers are also members of Amazon Prime and among those that aren’t, one in five are considering a membership in the next year.


Amazon Prime membership has several benefits, chief among them two-day shipping. The e-tailing giant has created such an expectation for this particular perk that competitors like Jet.com and Walmart have their own two-day shipping programs. And with the roll-out of Prime Now, which guarantees same-day delivery, and plans for drone delivery—still a bit of a pipe dream—it seems likely that the company will continue to pressure competitors into getting goods out faster.

“In terms of raising the bar for the rest of the world, no one else can compete with Amazon at this point,” says Marc Wulfraat, head of consulting firm MWPVL, which specializes in supply chains and logistics. “No one can even come close.”

Target has made some attempts to keep up: Participants in the company’s REDCard credit card program get free shipping on all online orders. “I do think we can get more credit for REDCard than we potentially have,” Target’s chief digital officer told Recode last month. Maybe start with the one in five.