Target to ditch Amazon, will open its own e-store
8/11/2009 by: Darleen Hartley
Target, at the onset of its on-line sales, turned to Amazon.com as the vehicle of choice to handle orders. That era will end in 2011 when their contract expires. Target [or "Tarjay", as sophisticated shoppers refer to it] is heading into e-commerce waters with its own platform.
The company with the red bullseye logo isn’t the only large retailer to jump off Amazon's ship. Toys "R" Us, the kid store, and Borders, the book store, are paddling their own canoe already, after leaving the Amazon fold.
As IT departments get a handle on controlling purchasing, tracking inventory and shipping, and managing the transfer of payments, and as the economy dictates keeping as much revenue in house as possible, we may see more third party contracts fall by the wayside.
Steve Eastman, Target’s president, says the company has been happy partnering with Amazon, but "it is in Target’s best interest going forward to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations."
Moving operations under its own wing could leave Target with more available money to increase the funds it uses to benefit the community. Profits currently come from 1,719 stores nationwide, as well as from Target.com, and their VISA REDcard credit card program. The 63 year old, Minneapolis-based company is also known for its charity contributions. The corporation gives five percent of its total income to grants and programs within the community. This has built up through the years so that today, Target hands out more than $3 million dollars a week.
Target supports art by making admission to over 100 museums free and by making artistic programs accessible to school children. In support of reading and the US troops, Target facilitates recordings by soldiers reading a children’s book onto DVD which is then sent to their child back home. Target employees volunteer at social service organizations like the Salvation Army and the Red Cross, in addition to funds given to those organizations by the parent company.
Most analysts see a rough road ahead - transitioning seamlessly from Amazon to their own platform and delivering to customers without a glitch is quite a challenge. GSI Commerce has been suggested as a potential assistant for the back-end operations. GSI promises "to ensure reliable performance of your Web store 24/7." Whether Target will join Toys "R" Us, Sports Authority, and Palm in using the services of GSI after leaving Amazon is yet to be seen.
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