Target made a huge mistake that helped one of its biggest competitors

Thomson Reuters

Amazon is to blame for Target's online hiccup on Cyber Monday — but not through any nefarious hacking.

While the retailer had its biggest online-shopping day ever this Cyber Monday, due to a 15%-off sitewide offer, Lee Schafer writes in the Star Tribune that the best day ever could have been a lot better if the company hadn't made a deal with Amazon in 2001.

Specifically, if Target had established its own online sales section at the turn of the 21st century instead of outsourcing the task to Amazon, the company would have already built up its online business and created a website that wouldn't have crashed when its sales mattered most.

While it seems crazy today that Target would trust what is now one of the biggest competitors in the retail space with its online business, that's exactly what happened in 2001.

At that point in time, e-commerce was not seen as a core part of Target's business. So, instead of investing in developing its own online store, Target signed a deal with Amazon to allow the e-commerce company to power its online business.

Thomson Reuters

The partnership continued until 2011. That's a full decade in which Target was unable to build, grow, and test an online site of its own.

Meanwhile, Amazon has grown into the No. 1 threat to the rest of the retail industry. Amazon's sales are exploding, with estimations by Deutsche Bank that the company's North America sales will beat the combined sales of major retail stores for the first time ever in 2015.

Amazon's innovations "are things that people working for Target should have spent those ten years learning to efficiently and reliably give its customers, reporting to a Target CEO who cared a lot about making sure the work got done," writes Schafer in the Star Tribune. "It should have been enough to get the company through Cyber Monday without having to ask its customers to 'please hold tight.'"

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