Target Is Taking "Baby Steps" To Challenge Amazon

By Sam Lewis

Minneapolis-based retailer begins subscription services in an effort to catch online retail giant

Retailers everywhere have felt the pain of lost revenue and diminished profits due to the innovative approach of online retailer Amazon. Target is the latest retailer tired of being Amazon’s doormat and has decided to do something about it.

On Wednesday, Sept 25 through its blog, A Bull’s Eye View, Target announced the launch of a new program allowing customers to subscribe to about 150 baby related items. Once subscription services are started, consumers can purchase items, and have them delivered on a rotation. The rotations can be scheduled anywhere from 4 to 12 weeks. “The rationale is pretty easy to understand: If you're a new parent, you're basically on a subscription plan whether you like it or not: You're buying diapers this month, and next month and on and on … so it's only natural that someone would think of closing the loop and formalizing the process,” says Mark Reilly of the St. Paul Business Journal.

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Reilly is also quick to mention this idea isn’t a Target original. A company called Quidsi began diapers.com and soap.com, offering subscription services for the purchase of namesake items. Amazon was quick to jump on Quidsi, acquiring the websites in 2010 for $540 million in 2010. The move was great for Amazon, as it enhanced the online retailer’s subscription services, but proved to be another thorn in the thumbs for large retailers.

Target, in fact, is a bit late to the party of subscription services. This shouldn’t be held too much against Target, though, as online shoppers are just now beginning to feel comfortable about the idea of digital subscriptions. But again, services like Amazon Prime can be given credit for this consumer comfort. In fact, subscription video services are another tactic Target is taking on to get under Amazon’s skin. The retailer recently launched Target Ticket, an on demand video services featuring movies and TV shows.

Perhaps Target’s timing into this relatively new territory will be perfect, allowing lots of opportunity for growth and innovation. But Target isn’t looking too deep into the possibilities of growth. Instead, the company says it will use what it learns though its subscription services on the fly, and apply it to future endeavors.