A University of Washington professor believes people should pump the brakes on any talk of Amazon buying Target.
The prediction was made by well-known tech analyst Gene Munster on CNBC last week. Munster highlighted Amazon would want to gain Target’s “mom’s demographic,” while also tapping into the retailer’s network of about 2,000 stores.
But Sureth Kotha, professor of management at UW’s Foster School of Business, isn’t buying the deal.
“Predictions are useful, but it’s not clear that whatever people from outside predict the company is going to follow this because they just did an acquisition last August,” said Kotha about Amazon’s recent Whole Foods acquisition. “It takes time to digest that acquisition before jumping into another acquisition.”
While Munster believes the Whole Foods acquisition was a sign of things to come, Kotha believes it was an anomaly.
“Because one of the areas where people are having difficulty breaking into the market is online grocery,” he said.
Kotha believes Amazon would do a better job of re-imagining retail, like its Amazon Go or Amazon Books stores.
“What Amazon is very good at is envisioning a future where they can use the technology plus a retail store to make a hybrid retail,” he said. “And do you really need a physical store as large as a Target store in order to do this stuff?”
Kotha also questioned whether this potential deal would change anything in the battle of Amazon vs. Walmart.
“I’m not sure if it’s going to move the needle in terms of the physical landscape and competing with Walmart,” he said. “Amazon’s strategy (is) do something different. You don’t want to play the game Walmart’s playing. Walmart’s very good in physical retail, and now you’re going to play that game? That doesn’t make a lot of sense from Amazon’s perspective.”
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