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Target will take website in-house by 2011
The move, made for greater flexibility, means more jobs, but the retailer won't say how many.
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With online sales becoming a more vital part of its business, Target Corp. said Friday it will bring the operations for running its website in-house by 2011 and end a decadelong contract with Amazon.com.
Amazon.com has been filling orders, handling customer service and providing e-commerce technology for Target.com since 2001, but Amazon has become a tough competitor for Target and other retailers, including Best Buy.
Building and managing the website internally will give the company more flexibility, a spokeswoman for the Minneapolis-based retailer said.
Spokeswoman Kelly Basgen declined to say how much the company planned to spend to beef up its Target.com division and how many jobs might be created. But she said the retailer, which has laid off 600 workers this year, would hire some internal positions and add jobs in Minneapolis and India during the next two years of planning and after the new site is launched.
It's unknown how much Target.com contributes to the company's overall sales because Target doesn't break out its online results. As Target has lost customers to Wal-Mart and other deep discounters during the recession, investing in its online site has become a necessary business strategy in what has become a $200 billion e-commerce industry.
"There's a lot more at stake now," said Scott Silverman, executive director of Shop.org. "It's a boardroom priority figuring out the role of the Internet in your retail business, where 10 years ago it wasn't."
The Target-built site is expected to be online by the 2011 holiday season. Basgen said it will be updated with better navigation, a streamlined checkout experience and more modern functions to help customers research products.
The decision comes with significant upsides and downsides, Silverman said. For example, the retailer will need a whole new set of technical skills. But the more consumers flock to the Web, the more retailers can use their sites for things beyond e-commerce.
"It could be ways to develop deeper relationships with customers. It could be ways to help make the in-store experience better, or to drive people into the stores," Silverman said. "For example, if you have a lot of product information on your website, and one of your challenges in stores is having knowledgeable sales associates, the Internet can help you educate your customers before they even come into the store."
Jackie Crosby • 612-673-7335
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