Target Could Have Acquired Jet.com And Boxed, But Decided Not To

Image courtesy of Mike Mozart

Recognizing that it needed to work on its e-commerce business, Walmart went on an acquisition spree, buying Jet.com and other existing businesses to build its online operations up very quickly. Target, it turns out, had the same opportunities to acquire its way into more robust online operations, but instead is sticking to basics and building its own online operations up.

Until 2011, Target’s e-commerce business was handled by Amazon. When the retailer finally took its website back, things went very, very poorly, resulting in the exit of Target.com’s top executive after only a few months.

In the years since, Target has had the chance to bolster its online operations through acquisitions, but the Wall Street Journal reports that the big box store has thus far opted to not purchase a number of high-profile websites.

For example, Target took a look at Jet.com, the online retailer that Walmart purchased last year for $3.3 billion. According to the Journal, Target thought that was too high a price to pay for Jet. And while Jet.com sells everything from cotton swabs to home furnishings, Target apparently felt the site’s large focus on household goods (which often have a low profit margin) didn’t mesh with its e-commerce desire to sell higher-profit clothing and decor products.

“We aren’t going to add products to our website and stores just because they exist,” Target’s chief information and digital officer, Mike McNamara, told the Wall Street Journal, clearly giving a sidelong glance at competitors Amazon, Walmart, and Sears.

Another possible takeover target for Target was Boxed.com, another website with a primary focus on items for your pantry, bathroom, and laundry room — but in bulk. It’s not known why those discussions fell apart, but it’s worth noting that Target recently announced a test program called Restock, which — if it goes national — would compete with Boxed, Jet, Amazon Prime Pantry, and many others for that market of people looking to buy paper towels, soap, detergent, and canned tomatoes online.

Target has tried some digital innovation. It started, then killed a third-party online marketplace and a prototype store, ultimately opting to get back to basics. It even killed off a partnership with the startup Curbside, but is working on its own curbside pickup service instead.

Though these and other deals — including the possible purchase of grocery chain Sprouts — did not happen, Target execs tell the Journal that the company isn’t writing off the idea of growth through acquisition.

“Thinking about possible mergers and acquisitions is something we do every day as a regular course of business,” explains McNamara, who adds that while retail is definitely heading toward an online future, people will be shopping “in stores for a long, long time.”