Gene Munster: Target's Drive-Up Innovation Makes It An Amazon Competitor, M&A Opportunity

Target Corporation TGT’s integration of a drive-up service at its stores and same-day delivery model give it a brick-and-mortar edge over Amazon.com, Inc. AMZN and add to the case for Target being a long-term acquisition target for Amazon, according to Loup Ventures. 

Target’s drive-up model allows customers to order items through the Target app ahead of time and pick them up at the store. 

This fast and convenient system is unique to brick-and-mortar retail stores and offers something Amazon cannot at this time, Munster said in a Thursday blog. 

“Target’s Drive Up service — leveraging assets that only brick-and-mortar can offer — is a good example of the innovation necessary to compete in retail," he said. 

Loup Ventures tested the drive-up service 10 times and found it had an average park-to-depart time of 1 minute 18 seconds.

“We are believers that Amazon will eventually buy Target, given Amazon’s interest in Target’s store count, and their shared customer demographic”.

The Shipt Acquisition

Target’s $550-million purchase of Shipt served as a strategic move to compete with Amazon Prime Now, although Target could struggle to integrate Shipt due to it being "outside of Target’s sweet spot (both strategically and geographically)," Munster said.

Related Links:

Susquehanna Upgrades Target, 'A Long-Term Survivor Of The Ongoing Retail Apocalypse'

Analyst Echoes Predictions Amazon Will Buy Retailer: 'Downtrodden Big Box, Department Store Player'

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