Amazon Has Scared Target Into Management Shake-Up, Just Like It Did To Walmart

No one has been able to figure out how to blunt Amazon's rise. And if Walmart, the world's largest retail business, can't generate the resources, imagination and effort to do so, it is not clear who will.

Short, that is, of governmental intervention, which given the history of actions against Microsoft and Google, is by no means out of the question. JL

Jason Del Rey reports in Re/code:

What the shake-up comes down  is a panicked decision driven by the realization that nothing Target has done has slowed Amazon from eating up more and more market share. This has meant decelerating growth in e-commerce sales as well as lower sales in stores. It follows Walmart's $3.3 billion acquisition of Jet.com, stemming from an inability to out-innovate Amazon, whether by turning stores into a real advantage rather than baggage.

In May, Target Chief Digital Officer Jason Goldberger was seated on a stage at Recode’s inaugural Code Commerce event talking about his promotion that had been announced that day. But just four months later, Target has eliminated Goldberger’s job and split his duties between two other executives.

In a statement, Target CEO Brian Cornell tried explaining the move with a buzzword gumbo of “accountability,” “speed up decision making,” “new direction” and “advance our efforts.”

What the shake-up really comes down to, though, is simple: A panicked decision driven consciously or unconsciously by the realization that nothing Target has done has slowed Amazon from eating up more and more market share in North America. This has meant both decelerating growth in e-commerce sales in recent quarters for Target — though still above the industry average — as well as lower sales in stores.

That pattern should look familiar. It follows a panicked giant bet by Walmart in its $3.3 billion acquisition of Jet.com and its CEO Marc Lore, who replaced Walmart e-commerce head Neil Ashe after the acquisition. That move stems from a similar place as Target’s: An inability to out-innovate Amazon, whether by turning stores into a real advantage rather than legacy baggage or by other means.

Goldberger spent nearly four years at Target after stops at Gilt and online furniture seller Hayneedle. He worked at Amazon for about eight years earlier in his career.

Target’s huge digital challenge will now lie with new Chief Information Officer Mike McNamara. He was hired by Cornell in 2015 after 17 years at the British grocer Tesco.