Friends with benefits
Wednesday 05 September 2018Article
The formation of 'era' allows the pooling of scale to drive sourcing synergies at the same time as creating a collaboration to build out digital and analytical capabilities.
This move follows similar partnerships announced by Tesco and Carrefour in recent months, and a wave of retail consolidation that is an inevitable structural response to the twin disruptive forces of channel shift and discounter growth.
But can 'friends with benefits' really ever deliver a compelling enough impact to counter these forces?
Multinational retailers have found cross border synergies infamously hard to deliver - for example if you look at the lengths that Kingfisher have gone through to crystallize these synergies (where the prize has only really begun to materialise once entire buying organisations have been brought together) it suggests looser alliances will deliver only very limited benefit.
So 'era' and other similar alliances may well deliver marginal returns and benefits but to assume this will allow MediaMarkt and FNAC Darty to counter the 'Amazonization' of their markets seems rather wishful thinking.
A more consummate marriage and restructuring is likely to be a pre-requisite to achieve that aim.
