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The retailers forming strategic partnerships to strengthen their brands

Walmart and Microsoft

Walmart is the largest physical retailer, with a presence of 30 markets around the world. However, in recent times, the company has understood the true importance of staying ahead of the eCommerce game, and has decided to reinvent itself.

In order to combat the likes of Amazon and its digital presence, Walmart has been boosting online presence and acquiring new digital capabilities as well as forming partnerships.

Recently, Walmart has joined forces with technology-led company Microsoft to share their different capabilities, in a hope to create the best possible customer experience. Walmart will now use the full range of Microsoft cloud solutions and believes that this will accelerate digital transformation through the use of Microsoft Azure and Microsoft 365. They are also already using Microsoft to embark on cloud innovation projects leveraging Machine Learning and AI to really boost the CX, with an aim to speed up the journey and make it more personalised and convenient for shoppers.

Walmart and FlipKart

Not only has grocery giant Walmart been working closely with Microsoft, but has also paid $16 billion for a majority stake in India’s largest online retailer FlipKart. Due to FlipKart’s strong presence in India, the relationship will aim to give Walmart greater possibility of entering the emerging Indian ecommerce market.

With ecommerce and the use of smartphones looking set to rapidly increase in India in the next decade, Walmart’s ambition is to successfully compete with rival Amazon, who has been working carefully to create a strong customer base in the newly emerging market.

Walmart has been trying to enter into India for over a decade, so partnering with a company that already has a strong foothold will enable them to successfully do so. FlipKart, which is an Indian electronic commerce company has several advantages in the emerging Indian market, mainly in terms of language, seasonality and governance knowledge. However, Amazon has recently begun to creep into FlipKart’s territory, so the power behind Walmart and FlipKart will aim to boost their presence within India and beyond.

The customer will also benefit from this partnership, with lower prices promised, and customer experience should see an improvement thanks to digital capabilities and great delivery options.

Sainsbury’s and Asda

Back in April, the UK’s second largest supermarket Sainsbury’s claimed that it had signed a £7.3 billion takeover of Walmart’s Asda.

According to Sainsbury’s, there are several reasons for the decision - one of the main ones being to lower costs and reduce prices for customers. This comes in light of the ever-continuing price wars between retailers, with the likes of Lidl and Aldi often coming out on top thanks to their vast European reach and increased buying power with suppliers.

While Sainsbury’s and Asda will continue to run as two separate brands, the partnership promises to create a dynamic new retail mix that will scale.

The two brands are similar in terms of store size, culture and complementary geography. Both companies are also implementing and embracing new technology that will help improve the online and in store customer experience.

In total, the two companies will make up 330,000 employees, and have stated that there will be no store closures. This reinforces the importance of a multi-channel strategy. eCommerce may have become critical to international expansion, but physical stores remain vital to cross-border growth. This is particularly true of supermarkets, where shoppers call in for anything from one item to an entire shop at a time that works for them.

Tesco and Carrefour

In order to cut costs and offer lower prices across the board to their customers, Tesco recently stated its plan to join forces with the well-established French retailer Carrefour. This news came after the Sainsbury’s-Asda partnership, but according to Tesco, discussions had been taking place for two years before the deal was made. They say that the alliance will give them the scope to better serve their customers, improving choice and value.

By forming a partnership, Tesco and Carrefour aim to stand their ground in the current pricing wars by getting better deals from suppliers and lowering their prices for their customers.

Tesco, which currently operates in 13 countries globally, is ranked at number 24 in Loqate’s International Retail Index for several key reasons, including great delivery options and click and collect, which can often boost sales options as the customer may be tempted by extra items upon entering the store.

Together, the two companies have a strong footing across Europe, Asia and South America, widening their customer-bases and making their global position much stronger than ever. This will give their international customers more options, lower prices and a great online and offline customer journey.

Amazon and Whole Foods

In 2017, Amazon bought high-end grocer Whole Foods for $13.7 billion to give the colossal retailer much more of a physical presence across hundreds of stores. However, this acquisition has caused a stir in the grocery world, with fear that Amazon may now become direct competition with the likes of mainstream retailers such as Walmart.

With grocers currently in a constant price war, the prospect of Amazon entering the market is a daunting one for many supermarkets. Its ability to provide low prices and speedy delivery in the world of retail ecommerce could mean an equally great customer experience within the realm of groceries, so supermarkets will need to stay alert with regards to this new competitor, and introduce similar capabilities to those Amazon has in place, including multiple payment options, the option to switch language and the use of type-ahead address verification.


Boohoo, Pretty Little Thing and Nasty Gal

Boohoo describes itself as ‘a global brand that doesn’t sleep’, and recent acquisitions suggest that this statement is indeed true.

After a decade of online trading, fashion retailer Boohoo purchased Pretty Little Thing in 2016, and the fashion focused brand bought the rights to Nasty Gal for $20 million in 2017 after the US company filed for bankruptcy. The aim of the acquisition was to accelerate Boohoo’s international growth, particularly in the US.

In fact, according to financial reports, since its acquisitions, Boohoo has seen strong revenue growth and market share, with UK sales up 49% and international sales up 60%.

Boohoo recently ranked number 2 in Loqate’s International Retail Index due to the company’s great delivery options, and use of features that facilitate international orders, such as the ability to switch language and currency, and international address verification, giving shoppers around the world a smoother UX.

Many companies are now realising the potential benefits of building strategic partnerships. Whether it is to take advantage of technological innovation or to boost international growth, we are sure to see more, not only retailers, but businesses across all sectors, forming relationships that will aim to make vast improvements to the way they work and the way they are seen by their customers.

Boohoo, Walmart, Tesco all feature in the Loqate International Retail Index. Discover what makes them so successful internationally, and find out where you rank against them.

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