Amazon's next step? Buying Target by the end of 2018, analyst predicts

Amazon's next step? Buying Target by the end of 2018, analyst predicts

(WBTV) - A venture capitalist is making a bold prediction for 2018 saying online retailer Amazon will buy Target by the end of the year.

The prediction was made by Gene Munster, co-founder of Loup Ventures, as a part of his "8 Tech Predictions for 2018."

"Amazon believe's the future of retail is a mix of mostly online and some offline," Munster said. "Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count."

Target's focus on moms is central to Amazon's approach to win wallet share, he added. Amazon has aggressively pursued moms through promotions around Prime along with loading Prime Video with kid-friendly content.

"Amazon's acquisition of Whole Foods 470 stores along with testing of the Amazon Go retail concept is evidence that Amazon sees the future of retail as a combination of mostly online and some offline," Munster said.

After aquiring Whole Foods, Amazon gained a 470-store presence for shoppers. If they were to aquire Target, the store count would jump to around 2,300 stores.

"Brick and mortar - traditional walk in the store - is still 85 percent of where people spend their money. So, to really flex their muscle and to really compete aggressively with Walmart it makes sense to have a retail footprint," Munster said in an interview with KARE-TV.

Munster says Amazon easily has the resources to make such a purchase, saying its $571 billion market capitalization towers over Target's worth of $35 billion.

"To put that number in perspective, (Amazon founder) Jeff Bezos alone is worth $100 billion, so he could buy it with a third of his personal wealth," said George John, a marketing professor at the University of Minnesota's Carlson School of Management.

"Investors would view this as Amazon taking over the world and that's a good thing," Munster said in an interview on Bloomberg Radio.

A Target representative declined Bloomberg's request for a comment on the report. Amazon didn't immediately respond to a request for comment.

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