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Will Retailers Up the Game Against Amazon With Consolidation?
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Retail is no more constrained to the four walls of its brick-&-mortar existence. Instead it is rapidly accepting the concepts of an increasingly digitized world as advancing technology and digital transformation are playing key roles in evolving consumer shopping patterns. Consumers now prefer to shop online from the comfort of their homes rather than hopping from one store to another.
Indeed, technology is reshaping retailers’ today and tomorrow. Retailers are fast embracing the omni-channel mantra to provide a seamless shopping experience, whether in stores or online or through smartphones via apps. They are allocating capital toward developing a multi-channel growth strategy, IT infrastructure, fulfillment centers and enterprise-wide inventory management system.
But will technology alone help retailers survive Amazon’s (AMZN - Free Report) growing dominance in the ultra-competitive environment or will they combine forces to bolster their position.
Is Consolidation the Path?
Be it department stores, discount retailers, supermarket chains or grocery players, all are in the race of survival of the fittest. So is consolidation the next path retailers may prefer to tread to thwart Amazon’s omnipresence? Market pundits believe that with a whopping market cap of more than $700 billion, technological prowess and outstanding consumer reach Amazon looks invincible in the near term. But left with no choice retailers may prefer to walk the tightrope hand in hand.
Last Friday (Mar 23), market was abuzz with news of possible merger talks between Target (TGT - Free Report) and Kroger (KR - Free Report) . Per Fast Company report, both the companies are discussing a probable partnership and are taking forward the talks initiated last summer. Shares of both these Zacks Rank #3 (Hold) companies went up during Friday’s pre-marketing trading session. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, there was no official comment from both the parties on the subject. Instead, later a CNBC report surfaced that denied any merger discussion but suggested Kroger may be in talks to partner with Target’s online grocery platform, Shipt. Nevertheless, analysts believe that if they choose to combine, Kroger could benefit from Target's e-commerce capabilities and merchandise assortments, while the latter could further strengthen its grocery business.
Target and Kroger generated $71.9 billion and $122.7 billion in sales, respectively, during fiscal 2017.
Notably, Target is leaving no stone unturned to gain a prominent position in the dynamic retail landscape. The company’s recent app-based service, Drive Up, allows customers to place orders using the Target app and have them delivered to the comfort of their cars. Further, its Target Restock program is also gaining traction.
Meanwhile, Kroger is strengthening its relationship with customers via both digital and mobile channels. The company is looking to expand its “Scan, Bag, Pay & Go and Self-CheckOut” program — piloted at 20 stores — to nearly 400 locations in 2018. Further, Ralphs — a unit of grocery giant — in partnership with Instacart is offering home delivery at select locations. Kroger remains optimistic about the acquisitions of Vitacost.com, an online retailer of vitamins and health-oriented products.
Wrapping Up
For sure, Amazon is aggressively making headway into retail space be it grocery, books, clothes and accessories or electronics, you name it and you have it. With its compelling pricing strategy and the buyout of Whole Foods — that shook the entire grocery industry of roughly $800 billion where Walmart (WMT - Free Report) holds a prominent position — the e-commerce juggernaut has caused a tectonic shift in the retail landscape.
Analysts viewed this $13.7 billion mammoth acquisition as an amalgamation between online marketplace and physical stores that could bring a massive change in the retail industry. Industry experts believe that rather than perishing, retailers with more or less same business line would prefer joining hands.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Will Retailers Up the Game Against Amazon With Consolidation?
Retail is no more constrained to the four walls of its brick-&-mortar existence. Instead it is rapidly accepting the concepts of an increasingly digitized world as advancing technology and digital transformation are playing key roles in evolving consumer shopping patterns. Consumers now prefer to shop online from the comfort of their homes rather than hopping from one store to another.
Indeed, technology is reshaping retailers’ today and tomorrow. Retailers are fast embracing the omni-channel mantra to provide a seamless shopping experience, whether in stores or online or through smartphones via apps. They are allocating capital toward developing a multi-channel growth strategy, IT infrastructure, fulfillment centers and enterprise-wide inventory management system.
But will technology alone help retailers survive Amazon’s (AMZN - Free Report) growing dominance in the ultra-competitive environment or will they combine forces to bolster their position.
Is Consolidation the Path?
Be it department stores, discount retailers, supermarket chains or grocery players, all are in the race of survival of the fittest. So is consolidation the next path retailers may prefer to tread to thwart Amazon’s omnipresence? Market pundits believe that with a whopping market cap of more than $700 billion, technological prowess and outstanding consumer reach Amazon looks invincible in the near term. But left with no choice retailers may prefer to walk the tightrope hand in hand.
Last Friday (Mar 23), market was abuzz with news of possible merger talks between Target (TGT - Free Report) and Kroger (KR - Free Report) . Per Fast Company report, both the companies are discussing a probable partnership and are taking forward the talks initiated last summer. Shares of both these Zacks Rank #3 (Hold) companies went up during Friday’s pre-marketing trading session. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, there was no official comment from both the parties on the subject. Instead, later a CNBC report surfaced that denied any merger discussion but suggested Kroger may be in talks to partner with Target’s online grocery platform, Shipt. Nevertheless, analysts believe that if they choose to combine, Kroger could benefit from Target's e-commerce capabilities and merchandise assortments, while the latter could further strengthen its grocery business.
Target and Kroger generated $71.9 billion and $122.7 billion in sales, respectively, during fiscal 2017.
Notably, Target is leaving no stone unturned to gain a prominent position in the dynamic retail landscape. The company’s recent app-based service, Drive Up, allows customers to place orders using the Target app and have them delivered to the comfort of their cars. Further, its Target Restock program is also gaining traction.
Meanwhile, Kroger is strengthening its relationship with customers via both digital and mobile channels. The company is looking to expand its “Scan, Bag, Pay & Go and Self-CheckOut” program — piloted at 20 stores — to nearly 400 locations in 2018. Further, Ralphs — a unit of grocery giant — in partnership with Instacart is offering home delivery at select locations. Kroger remains optimistic about the acquisitions of Vitacost.com, an online retailer of vitamins and health-oriented products.
Wrapping Up
For sure, Amazon is aggressively making headway into retail space be it grocery, books, clothes and accessories or electronics, you name it and you have it. With its compelling pricing strategy and the buyout of Whole Foods — that shook the entire grocery industry of roughly $800 billion where Walmart (WMT - Free Report) holds a prominent position — the e-commerce juggernaut has caused a tectonic shift in the retail landscape.
Analysts viewed this $13.7 billion mammoth acquisition as an amalgamation between online marketplace and physical stores that could bring a massive change in the retail industry. Industry experts believe that rather than perishing, retailers with more or less same business line would prefer joining hands.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>