Sorry Target! Here's How Amazon Won My Cyber Monday Money
Steve is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Perhaps against our better judgement, my wife and I decided to brave the craziness that is Black Friday this year. Of the items we bought that day, we were most excited about one in particular - a $99 children's tablet from Target (NYSE: TGT) for which we could buy e-book and educational game cartridges. In addition to the tablet, we also purchased two cartridges "on sale" for $15 each, for a grand total of $129.
Think of the potential! If my children were to play with an electronic device, they may as well be learning something useful in the process. Over time, as they grew tired of the existing applications, we could buy additional cartridges for a mere $15 to $25.
The weekend came and went as we proceeded to bask in our self-declared parental genius. With our shopping done and Cyber Monday winding down, I decided to visit Amazon.com (NASDAQ: AMZN) to buy the latest episode of Supernatural from the the Amazon Instant Video Store.
Amazon: 1, Target: 0
When Amazon's front page loaded, it greeted me with the now-infamous $129 Kindle Fire deal. For the same price I paid for the smaller education tablet, I could buy the larger, more flexible Kindle Fire. Then, as though prophetically overcoming my objections, Amazon touted its new Kindle FreeTime interface for kids and displayed a customized list of available children's applications based on our past toy purchases.
Within minutes, Amazon had turned Target's Black Friday brick-and-mortar sale into its own Cyber Monday revenue.
One could argue this is an exceptional case, comparing an inferior educational tablet to a more comprehensive solution in the Kindle. In the end, that's beside the point; Amazon's personalized shopping experience is unrivaled, and these kinds of sales are the single biggest threat to brick and mortar retailers.
If you can't beat them...abandon them?
My experience is even more ironic considering both Target and Wal-Mart (NYSE: WMT) decided to stop selling Amazon's Kindle in their stores just a few months ago. Shortly after Target's announcement, Fellow Fool Rick Aristotle Munarriz even speculated electronics specialist Best Buy (NYSE: BBY) could send a strong message by following suit.
On one hand, Target and Wal-Mart were certainly right to recognize the Kindle's ability to act as a Trojan Horse and cannibalize their in-store sales. On the other, if either company had been able to find a way to play nice like Best Buy, they might have secured my Black Friday dollars - even at a higher price point. In any case, Amazon wins.
That said, I still believe Target and Wal-Mart are great stocks in their own right and serve their markets with ruthless efficiency. Sure, Amazon is riding the growing online trend and might seem like retail's 800 pound gorilla right now, but its sky-high valuation reflects that optimism and leaves some investors worrying it may not be a safe bet at current levels. Even so, Amazon remains one of the world's most promising companies and my "Outperform" CAPScall for its shares will stay open for the foreseeable future.
Steve Symington has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com and Best Buy. Motley Fool newsletter services recommend Amazon.com and Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!