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Target Fights Amazon with Kindle Firing

Posted by Dale Buss on May 3, 2012 04:27 PM

More and more, big bricks-and-mortar retailers have their backs to the wall. In the case of Best Buy, the shakeup has rattled the executive suite. But in the case of Target, the seachange has prompted retaliation.

Target has announced that it no longer will be selling Amazon's Kindle e-readers as a retaliatory measure for Amazon's encouragement of American shoppers to "showroom" products at retailers and then buy them less expensively online. Given that Target was the first brick-and-mortar retailer to sell the popular e-reader, the move is particularly galling for Amazon.

The Minneapolis-based chain became one of the bigger carriers of Amazon in the world of physical retailing. But Target couldn't abide Amazon's blatant attempts to get shoppers to size up products at traditional stores, then walk out and order them from Amazon. At Christmas, for instance, Amazon launched a mobile promotion on its Price Check app that gave shoppers an incentive to shun retailers: a 5 percent discount on any item scanned into a smartphone at a store.

"What we aren't willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices," Target executives wrote in a letter to vendors in January, according to the New York Times.

Meanwhile, Best Buy, another chain that seems under even more pressure than Target from the digitalization of retailing, and showrooming, has suffered another casualty. Global CMO Barry Judge has stepped down as Best Buy remakes its senior leadership team, according to the Minneapolis Star-Tribune. Best Buy CEO Brian Dunn departed earlier amid allegations that he used company resources to conduct an affair with an employee.

Target will continue to carry Apple's iPad and other e-readers and accessories, including Barne & Noble's Nook. Indeed, the New York Times reported earlier this year that Target plans to test Apple "mini-stores" as part of its in-store branded boutique push.

While it isn't clear whether Target's move will hurt Kindle sales, it could be copied by other retailers and elevate the retailing industry's battle over showrooming.

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