Chasing The Customer … Does Amazon Have Alternatives to Buying Sears?

UPDATE!

Jeff Bezos has lost over $ 6 billion since January 1st.

http://www.businessweek.com/articles/2014-04-21/jeff-bezoss-net-worth-dives-in-2014

 

 

Does Amazon Have Alternatives to Buying Sears?

 

sears

My good friend Richard Essigs sent along the following:

http://www.businessinsider.com/amazon-should-acquire-sears-2014-4

Basically it gives four reasons for Amazon to buy Sears.

 

Does Alibaba Change The Amazon Market Strategy?

Alibaba is about to launch a U.S. IPO. Alibaba is China’s version of Amazon. It’s sales are larger than Amazon and eBay combined. They are expected to raise about $130 billion. Yahoo, part owner of Alibaba is expected to receive about $19.2 billion from the IPO.

So that gives us some perspective as to why Jeff Bezos always seems in a hurry to find the next big thing.  What if Alibaba expands out of China? What if Yahoo decides to go into some form of Omnichannel retailing? Does Amazon have to get an Omnichannel footprint too? (Remember, a lot of Amazon’s shipments used to be physical books and DVDs. Now that business has shifted to digital. How do y0u replace that volume through your warehouses? Is the digital world by itself big enough for Amazon or does it need physical goods and brick and mortar locations also?) What if Wal-Mart really gets into e-commerce … and has the brick and mortar footprint too?

There is a lot of chatter on the Internet that someone should buy Netflix. Apple and others. Netflix has a market cap of around $20.6 billion. Many on the street think that that deal makes sense. Amazon is mentioned in some circles as a potential buyer. It’s a pure Zettabyte play.

So … should Amazon look at Omnichannel too? Well ya gotta look! [Note: Amazon is just finishing a massive distribution center not far from Jacksonville. That’s the good news … same day delivery possible. The bad news? On May 1st, all Floridians will have to pay state sales tax. Does that level out the brick and mortar playing field a little?]

Does Sears make sense for Amazon? Sears has a market cap of approximately $4.1 billion. Far cheaper than Netflix at $20.6 billion, but how broken is the Sears brand? Old stores, Old Customers, Old IT systems, Old brands?

If Netflix seems to make sense at $20.6 billion, then what about an Omnichannel play for Amazon? How much will it cost to build out a distribution and brick and mortar footprint?

What About Kroger or Macy’s?

Steve Bisson/Savannah Morning News - Sandra Hamilton, floral manager, tends to the flowers at the new Kroger Marketplace on Mall Boulevard.

What if you looked at Kroger at $22.6 billion market cap (Amazon is working hard at a same day grocery delivery pilot in northern California.) or even Macy’s at $20.9 billion market cap? Kroger has a very sophisticated CRM plan with Dunnhumby, a large retail footprint designed for multiple price  and market points and sells both groceries and general merchandise in many of its stores.  (Both Kroger and Macy’s have a larger EBIT than Amazon.) Think about it. Yahoo could be in the ball park to buy either one just out of the Alibaba windfall alone. Would they? What if they joined with Alibaba and overnight had brick and mortar, Internet and the world’s largest sourcing center for products?  Where would such a move leave Amazon?

In this fast changing world of consumer retailing it does not take long to go from first to last or last to first. (Just look at the Sears story.)

 

 

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