It really depends on how they define the market. Given that lines between e-commerce and physical retail have been blurring, and most customers now participate in both, I think they should be looking at the total market for each category of product regardless of modality. Online stores and physical stores do compete against each other, as can be seen in their pricing and sales tactics.ClownLoach wrote: ↑January 23rd, 2022, 3:15 pm
The FTC wouldn't raise an issue at all. Target does not have a significant "traditional" e-commerce business - they eliminated their e-commerce DC's several years ago as they were not busy enough and all the orders come from the closest store to the customer. So the e-commerce businesses have minimal overlap. Target true ship to customer e-commerce business added to Amazon would be such a tiny increase it would be like a rounding error.
Amazon does not have a retail discount store business, Target does. Amazon does not have a significant mainstream grocery store business, Target does (Whole Foods is a specialty). The reason an Amazon-Target merger would be a slam dunk is the fact that both companies fill in the gaps in the other business with almost zero significant overlap. Every few months a financial pundit will suggest the same transaction because they know it would go through.
FTC looks at when competition in the same category of business overlaps and results in a monopoly in the category. The Amazon Fresh stores are money losers and low volume so they would not be a significant obstacle and I'm sure they would close them all prior to finalizing a bid. What else is a true significant overlap between the two?
But as storewanderer said, the FTC (and arguably the government in general) have become a joke and will probably rubber stamp it after the companies donate some campaign funds to the correct people.
Target is the 7th largest retailer in the country, and many of their customers would not be caught dead setting foot in a Walmart. They don't need to compete against Walmart on price. Walmart is already the lowest-priced store in most markets, so I doubt a price cut campaign would have much impact on anything. At the most, it might hurt local supermarkets and such, but Target will be just fine.ClownLoach wrote: ↑January 23rd, 2022, 3:15 pm The reality is that Walmart is growing slower than they would like to, but they are almost 7 times larger than Target. Target is surprisingly small and fragile by comparison. Walmart could do a price cut campaign and wipe Target off the map with surprising efficiency. Walmart could take a quarter of Target's total revenue and it would only result in a low single digit sales increase for them. They are going to get squashed unless they get bigger, fast.
But back to the topic of this thread, I don't think Amazon views its retail stores (Fresh, Books, and now the clothing/department stores) as viable retailers. I think the goal of these stores is to boost online sales, by providing streamlined pickup and return locations and improving brand awareness. The boost in online sales should offset any losses incurred by the stores.