Wednesday 19 June 2013

Amazon should buy Ocado, says Cantor Fitzergerald analyst

One of America's top technology analysts has said that Amazon should buy Ocado, describing the online retailer as having one of the “most advanced technology platforms” for grocery delivery in the world.

In fact, KamBlog readers will have come to this conclusion on 14th August 2012  when we wrote that Ocado’s banking issues represented ‘an Amazonian window’, and again on 26th November 2012 ‘Amazon-the-grocer moves from 22,000 to 150,000 products since July 2010’, making the M25 ‘market’ a natural test-bed…

Why now?
According to The Daily Telegraph, the Morrisons’ deal has put companies that have eyed Ocado for much of the past three years back on “red alert”, including Boots, Amazon and Carrefour, who are considering a licencing deal (a networking tip for your continental colleagues?).

Cantor Fitzergerald analyst Youssef Squali said: “We believe an Ocado deal would bring much more automation to grocery delivery within Amazon and accelerate AmazonFresh’s roll-out across the US.”

Amazon has been testing Amazon Fresh in Seattle for six years and recently expanded it to LA. It is thought to be considering entering 20 US cities.

Why it matters?
The real issue is not the fact that Amazon may be contemplating the inevitable, but that given some pointers, a NAM can be trained to recognise early signals in the market. In fact, by joining up the dots (or having them joined for her),  a NAM can sometimes have at least six months ‘warning’ of a customer move.

This time-advantage has to provide an opportunity to anticipate or even implement a strategic response while competing NAMs are surprised on the day, and have to resort to a reflex re-action…

...and the facts, figures and opportunities are all around us (especially in retailer's latest Annual Reports), all for the want of knowing what to look for, coupled with a creative ‘what if’, or two, combined with the potential synergies arising from a NAM's day-to-day relationship with the customer… 

In fact, ignoring what a retailer says about its finances has to represent one of the biggest and most dangerous tricks a NAM can miss…

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