Minnesota-based fast fashion big box retailer Target announced Wednesday that it will stop selling Amazon’s Private Brand Kindle devices, the latest in a series of disputes between the two companies. This is the week for Private Brand electronics to make the news and both stories illustrate the value and competitive advantage that owning Brands that are assets bring to the business.
The news was leaked earlier this week when an internal memo obtained by website The Verge, the communiqué stated that, after evaluation, Target “has made the decision to no longer carry Amazon hardware.”
Target will no loner sell Amazon Private Brand Kindle e-reader and tablet devices, including the new Kindle Fire tablet, as well as all accessories for the devices like covers and chargers. The retailer will continue to sell other e-readers and tablets, however, including Barnes & Noble’s Nook and Apple’s iPad.
“Target is phasing out Amazon- and Kindle-branded products in the spring of 2012,” Target spokeswoman Molly Snyder wrote in an email to Reuters. “We will continue to offer our guests a full assortment of e-readers and supporting accessories.”
There are a few potential reasons for Target’s decision. As Reuters noted, Amazon ran Target’s website for several years, but that relationship ended last year amid a legal battle.
“That’s probably something Target now regrets. It put them behind in the world of multi-channel retail and let a serious competitor learn a lot about their business,” Matt Nemer, an analyst at Wells Fargo, told Reuters. “This is evidence that Target is getting more serious about Amazon as an enemy rather than a partner.”
After all, everything sold in Target is also offered by Amazon, Reuters noted. “Target is trying to distance themselves from Amazon as much as possible because they recognize they are losing sales to them,” Scott Tilghman, an analyst at Caris & Co. told Reuters.
Amazon’s practice of undercutting the prices of traditional retailers certainly can’t help their case, either.
“If Target did make the decision in an effort to mollify Apple, that would be sort of a retro-chic move in an era when big retailers tend to dictate terms to manufacturers rather than the other way around,” writes CNN Money. “There aren’t many manufacturers with market power like Apple’s however.”
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