Consumers have continued to shift more toward online shopping, leaving brick-and-Mortar retailers struggling to compete in the online space against e-commerce giant Amazon (NASDAQ:AMZN).
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Walmart (NYSE:WMT) stepped up its game by acquiring Jet.com for $3.3 billion in 2016, in effort to expand its e-commerce operations.
Yet, Amazon seemed to buck the trend with its $13.7 billion purchase of Whole Foods. The deal has since led to speculation over which brick-and-mortar might be purchased next. Loup Ventures Managing Partner Gene Munster recently predicted that Target (NYSE:TGT) would be Amazon’s next acquisition target.
Both companies have been quiet about any potential deal that may be in the works. But Munster isn’t surprised, telling FOX Business’ Stuart Varney on “Varney & Co.,” “Well, the companies aren’t going to say anything.”
Munster sees a potential deal for Target as a way for Amazon to expand.
“They need to grow their business and this is one of the biggest ways they potentially can do that.”
Munster explained that Amazon has set its sights on Target because they have a shared demographic.
“They’re going after women typically…So, right now about 58% of the spending comes from the woman in the household, 10% comes from, typically, the man in the household and about 30% comes from a shared spending.”
According to Munster, Target would allow Amazon to gain more market share in its key demographic along with extending the company’s reach in brick-and-mortar.
“So, the opportunity for Amazon here is to dive into that. This will give them an opportunity to really go after a bigger demographic and separately, expand their reach in brick-and-mortar stores.”