Burt Flickinger, Managing Director at Strategic Resource Group, joined Closing Bell's Hena Doba to break down Target's latest push into e-commerce, as the big box retailer adds new delivery hubs designed to get online orders to customers faster and at a lower cost.

Closing Bell

Target Expands E-Commerce Business as it Looks to Compete with Amazon

Welcome back to closing bell and cheddar news. Big big box retailers are changing with the times and making a big push towards e commerce. Target is the latest retailer to shift focus online announcing three new delivery hubs as it attempts to find a faster and cheaper way of getting online orders to your door. We've seen walmart make similar investments as these big name retailers look to compete with amazon's dominance in the e commerce space joining us now, Burt Flickinger, managing director at Strategic resource group Burt, welcome to the show. E commerce accounts for some 20% of targets revenue, not bad, but because of labor and transportation costs, those sales of course are less profitable than in person shopping. What do you make of this latest move by target? It's a brilliant segue on targets. Part to move to control its own destiny in direct delivery and target is going to completely eclipse the Walmart 1199 uh, initiative for direct direct delivery in Denver where targets also testing. So it's a target and Walmart shareholder. I applaud the initiative especially with their respective stocks down over 30% year today John Mulligan CCOO to co lead this initiative at target is brilliant. So in the first quarter, the six existing target hubs handled 4.5 million packages soon they'll add three more. Could this be a complete transformation for the company moving forward Burke, You're completely correct to use the word transformation because target can go from a little less than five million deliveries to 60 million deliveries within a couple of years doing a combination of target shift. The target sort ation and delivery hub centers Along with Fedex, it's the perfect four cornerstone uh, perfect for cornerstone combination. Do you think walmart and uh, target could actually compete with amazon on the e commerce space part. Yes, because full disclosure had eye on our strategic resource group team, worked for the first buyer of whole foods and that's been a real uh, catastrophe and a drag on amazon. So amazon struggling between unionization with chris smalls in the new york area on one side with his brilliant unionization effort and amazon struggling on bricks and mortar, retail and third party delivery. Uh, so target, which had had a good partnership with amazon uh, could really eclipse amazon on both wearables. Were targets so strong and consumables where target especially with private label is making some distinct and decisive gains. You know, it seems same day or one day delivery is the goal here for target. How important is that feature for all of us online shoppers out there. It's important had especially since 60% of Americans are cash and credit constrained living paycheck to paycheck, putting more money on credit cards. So they want to postpone purchases as long as possible. Also consumers will applaud this initiative by target because one of the unreported elements is the tremendous amount of theft by the drivers of the major gig delivery companies that hire workers by the hour by the day and those worker drivers are stealing unprecedented amounts of product. Plus there's tremendous amount of crime in Chicago, in philadelphia as well as new york city where we're broadcasting from where this is being tested. So target, controlling its destiny is making a giant leap forward as paraphrasing great jazz player, john Coltrane a giant step forward for the consumer and for public safety and for certainty of delivery. Looking ahead to amazon earnings here. Bert analysts have been slicing forecasts ahead of the report as they typically do after last quarter's historically bad performance. Could we be in for another bloodbath here when it comes to amazon had I, you're completely correct, amazon's under unprecedented pressure on its stock price. I'm a long term satisfied amazon shareholder, but I've been telling friends, family and business colleagues to sell the majority of his or her amazon holdings because Amazon really is chaotic in the last 10 m 2000 m of delivery and ups, which is also reporting this week should, should have better metrics than amazon. And if amazon had ups unionized delivery metrics through the teamsters, amazon would be a lot better off. But by fighting it and without the heart and soul of the company Mackenzie scott, ex wife of Jeff Bezos providing a philosophical and societal foundation for amazon amazon seems to be losing its way in a little bit uh, to be retained, rudderless and retail heading into the future where targets clearly on course and target is going to be the clear winner. Amazon's gonna go sideways to southbound Burt Flickinger, managing director at Strategic Resource Group, always appreciate the context and in cyber. Thank you.