Target Corp. (NYSE: TGT) was a crown jewel in the retail world in 2008. It was seen as a more upscale and clean alternative to Wal-Mart Stores Inc. (NYSE: WMT) but with the same discount strategy. It was winning customers for most of last year.
Then the economy went south (almost to the South Pole). Customers immediately flocked to save as much money as possible and obtain everyday staples as cheaply as they could. Target got whacked by reality. It's been playing catch-up to Wal-Mart ever since.
So, with the economy rebounding and the holiday shopping season fast approaching, will Target bounce back to lead the discount pack? That's doubtful, as Wal-Mart has taken the downtrodden economy as a chance to continually drop prices and preach that it saves the American consumer more than ever.
Although book-reading gadgets are popular these days, old-fashioned books are hot holiday sellers. This holiday season, best seller prices will be lower than ever. Want that latest Dean Koontz novel in hardback? Less than $10 at your local Wal-Mart or Amazon.com (NASDAQ: AMZN). And, now, Target.
Wal-Mart began selling best sellers from Walmart.com for $10 last week, which includes free shipping. In an odd twist, these selections will not be available in Wal-Mart retail locations. Amazon.com responded by going the same route, and both retailers chopped prices to $9 a day later. Now, Wal-Mart and Target are at the $8.99 level -- a penny less than online-only retailer Amazon.com.
It's pretty certain that all three retailers are using hardcover book sales as loss leaders to get customers shopping on their respective websites. But, unlike driving to a retail location, customers can visit multiple websites with a few button clicks. Expect more battles in the online arena this holiday season similar to this. It's just getting started.
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