Supply Chain News Bites - Only from SCDigest
 

-August 11, 2009

 
 

Logistics News: Target Latest Retailer to Leave Amazon.com to Take Control of e-Commerce and Fulfillment

 
 

Learn the Lessons, then Leave? Integrating Multi-Channels Effectively

 
 


SCDigest Editorial Staff

Target Corp. announced last week that after almost nine years of partnering with Amazon.com for e-Commerce and fulfillment services, it was planning to end the relationship and take over the functions internally prior to the 2011 Christmas season.

 

Last year, Target had some $1.2 billion in on-line sales through Amazon. Amazon not only provides actual order fulfillment services for Target, but it’s e-Commerce technology services provides much of the transactional systems supporting Target.com. While Amazon is most known as a direct retailer in its own right, it also has a large business providing e-Commerce services and/or fulfillment services for retailers and manufacturers

 

Lately, some retailers have been pulling away from Amazon to take direct control of their own e-Commerce needs. In addition to Target, which started working with Amazon when it launched Target.com in 2001, Borders and Toys "R" Us also announced plans within the last year to bring their web operations and fulfillment back in-house.

 

Several factors may be behind such moves. First, partnering made great sense early on, when the web channel was relatively new, and few retailers well understood the requirements and what order volumes and patterns would be. There usually was pressure to get an e-Commerce channel up rapidly – which Amazon.com could help achieve.

 

Now, however, retailers have learned from their experience – and Amazon’s – and feel more comfortable with requirements and volumes.

 

Bringing operations back in house may also allow retailers especially to better integrate web channels with retail stores. Such “multi-channel” strategies, for example, can enable a customer to order on-line but pick up at the store, among other strategies.

 
 
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