Target to Amazon: buh bye
This applies only to back-end operations, not the user experience. If you've ever shopped Target.com, you probably had no idea that the processing and order fulfillment was being taken care of by Amazon. But back in the days on online infancy, 2001 to be precise, Target management thought it best to let a more experienced company handle something new and unfamiliar.
Why would Target do this? As Daily Finance contributor Douglas McIntyre aptly wonders, "it's a puzzler." Sure a lot of time has passed since that initial decision, but what have they got to gain by bringing this in house?
There will likely be server interruptions as new software and back end support gets implemented, and maybe even a shipping snafu or two.
Perhaps Target is feeling stung by a scuffle with activist investor and hedge fund manager William Ackman earlier this year. Ackman wanted a seat on the board and a say in how Target allocates merchandise and manages real estate.
Cutting all ties won't happen overnight. Amazon and Target have a contract through 2011, and the according to a press release, the two will work together to manage the transition. Expect closer ties between the online site and physical stores, including in store pickup or exclusive promotions.