Amazon Tipped To Buy Target

"Brick and mortar - traditional walk in the store - is still 85 percent of where people spend their money". "Keep in mind that Amazon and Kohl's are also collaborating on some in-store tests of "smart home" shops and return centers".

Amazon has been looking to beef up its physical presence as it takes on its retail rivals.

As for when this might happen, if it does, Munster said, "Getting the timing on this is hard, but seeing the value of the combination is easy".

As an example of how the partnership between Amazon and Target could work, Munster pointed to the ecommerce giant's purchase of Whole Foods to show how the combination of online and offline operations can be utilized.

The prominent technology analyst and founder of Loup Ventures, Gene Munster, announced his eight predictions for 2018 and causing a stir in the retail industry is what he himself describes as his boldest prediction: Amazon will buy Target this year.

Target in the United States is a listed company in its own right and Amazon will have to cough a premium up if it wants control. And like Target Australia, it has struggled to turn a profit in recent years despite having a large market share.

Amazon shares rose 56% in 2017 versus Target stock's 10% decline.

While Munster believes the Whole Foods acquisition was a sign of things to come, Kotha believes it was an anomaly.

Amazon closed its $13.7 billion acquisition of Whole Foods Market in August.

But it's not at all clear that Amazon and Target agree.

However, he pointed out that Amazon still only had 470 stores, compared with its biggest USA competitor Walmart's 11,695.

The second is Target's store network, which is fairly comprehensive but still manageable for the online shopping titan.

Mr Munster also predicted that U.S. competition laws would allow the takeover.

Also speaking to Bloomberg, Techonomy CEO David Kirkpatrick said Mr Munster's prediction was "not crazy", but said the political climate made it unlikely.

Happy new year, Austin!

Whether this interest translated into high sales figures over Christmas is yet to be seen.

"Getting the timing on this is tough, but we think there's a 60% to 70% chance Amazon will buy Target this year", Munster told CNBC. As for retail stores, Amazon's acquisition of Whole Foods 470 stores along with testing of the Amazon Go retail concept is evidence that Amazon sees the future of retail as a combination of mostly online and some offline.

He said Australian retailers, rather than fearing Amazon's appetite, could submit to it.