The 470 Whole Foods locations has provided Amazon with opportunity to test its retail concepts like Amazon Go-stores that allow consumers to walk in, take products, and pay without going through the standard checkout process. "Target's shops would give Amazon a ready-built distribution network through which it could offer services like collect-from-store and return-to-store". He's long predicted that Apple will release its own TV at some point and has pushed rumors that the company will produce its own auto, both of which have yet to come to fruition.
Target Australia is creating big headaches for owner Wesfarmers and has contributed to its share price underperformance with the stock recording a relatively paltry 4.5% gain over the past year, despite strong coal prices and strength in its Bunnings chain. "This is an area of potential weakness for Amazon, especially as Walmart ramps up its efforts in this area", he said.
Both Amazon and Target told KDKA money editor Jon Delano that they had no comment on Munster's prediction. This prediction was last on the list and clearly the boldest in comparison to others like Bitcoin pulling back or the iPhone ASP rising for Apple (AAPL).
But it's not at all clear that Amazon and Target agree.
"Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count", Munster wrote. "If anything, a merger or even a partnership (lockers?) might make more sense given their size, but even that seems pretty far fetched".
The analyst may be referring to the U.S. but the reasons behind his prediction are just as relevant for the Australian market where Target is struggling. The only option would be a debt-fueled move similar to Whole Foods. But it needs big warehouse spaces to compete with Walmart. But Costco's stock has been healthy for decades, and it only has 741 locations in the US.
Amazon could always throw a curve ball as it attempts to gobble up every industry in its path. Antitrust regulators won't have a problem with that. No matter what, in a few years time, we'll all work for, buy our goods from, and cash our checks with Amazon.