Target To Tap Into Amazon.com

MINNEAPOLIS, MINN.— Target said it will begin selling consumer electronics and other product categories through Amazon.com later this fall.

Thousands of items including CE, apparel, jewelry and home furnishings would be available through a dedicated Target store that will be located on the Web site of the world's largest e-tailer.

In addition, Amazon will provide its proprietary e-commerce technology services to Target parent Target Corp. for existing cyber stores including target.com, MarshallFields.com, Mervyns.com and GiftCatalog.com beginning next summer. The services would include order fulfillment and customer care, the companies said.

The agreement, announced earlier this month, represents a continuation of Amazon's strategy to partner with established brick & mortar retailers, which to date include Circuit City, Toys 'R' Us and the Borders bookstore chain.

Through these online partnerships, Amazon hopes to broaden its assortment and customer base, lower inventory and fulfillment costs, and develop its e-tail services business into a significant revenue source.

"We're always looking to expand selection for our customers, and this strategic partnership with a leading retailer like Target hits the bull's-eye," said Amazon founder and CEO Jeff Bezos.

Added Target Corp. vice chairman Jerry Storch, "Target.com has experienced tremendous growth in the past 12 months and we believe this new Target store at Amazon.com provides another opportunity to expand our business." He also said that the online alliance will "further strengthen our brand and deepen our relationships with our guests."

Target was last among its discount chain rivals Wal-Mart and Kmart in establishing an e-commerce presence, and still lags it peers in online sales and selection.

Meanwhile, Amazon, which has been beefing up its CE presence by connecting with Circuit City and breaking out its PC and imaging products into separate online stores, adds another source of authorized electronics to its list (see TWICE, Sept. 3, p. 1). The e-tailer maintains that CE is its fastest-growing category and second only behind books in sales, and according to Todd Smith, a channels program analyst for market research firm ARS Inc., new CE products like Microsoft's Xbox video game platform could be crucial to Amazon's holiday selling season.