French retailers are worried about Amazon and perhaps rightly so. Recently Amazon have exhibited a voracious appetite for competing in just about every retail segment going from household goods with Amazon Pantry, groceries with Amazon Fresh, potentially a launch into selling cars and of course a never ending deluge of media and consumer products which are their core business.
Carrefour
Carrefour is a massive supermarket retailer with stores in 30 countries around the world. Founded in France in 1958, the nearest English equivalent would perhaps be Tesco. They’ve just recruited Alexandre Bompard as their new CEO and that’s interesting as he’s been FNAC’s CEO and whilst there launched their IPO and oversaw a merger with Darty.
FNAC Darty
FNAC has the same problem of retailers and marketplaces the world over – Amazon is coming and they need to figure out how to complete. In France Amazon isn’t the all conquering giant with just eBay as a competitor, the French marketplace business is much more fragmented but still Amazon is the one that they’ll all watching.
At FNAC, Alexandre broked the merger with Darty, a French electronics and household appliance business. This instantly turned FNAC into the leading French electronic retailer and that will make it harder for Amazon to gain market share in the country.
What do Carrefour need?
Now Alexandre has been snagged by Carrefour, they’ll be looking for him to not only grow their business but protect them from the tentacles of Amazon. Groceries is a massive part of their business but as well as thousands of supermarkets Carrefour have hundreds of hypermarkets too selling electronics and household goods. If Amazon start nibbling away at their grocery business it won’t take long before they steal their electronic and household customers too.
Carrefour are facing the same sort of pressures that FNAC did and still do to some extent. The Darty acquisition isn’t enough on it’s own to win against online players – it’s not just Amazon, Priceminister (Rakuten) are huge in France and then there’s eBay and another half dozen other marketplace competitors.
FNAC Darty and Carrefour – Marketplace opportunities
Trading as a marketplace can obviously help both by broadening the range of products on offer and lowering inventory and storage costs. Carrefour are no strange to the marketplace model (you can for instance also sell on Carrefour in Spain and Poland). What’s especially interesting is that you can choose to sell your products online only, or you can choose to additionally have them available to buy in Carrefour hypermarkets.
Two immediate opportunities come to mind for Carrefour – extend the marketplace model on Carrefour or, perhaps a more radical idea, forge ties with FNAC Darty to collaborate. FNAC could take up retail space in Carrefour hypermarkets and Carrefour could make their products available on FNAC.
If you think the tie up between a hypermarket and electronics retailer come marketplace is far fetched, you don’t have to look any further than the recent Sainsbury’s acquisition of Argos in the UK to realise it can work. Argos are already positioning stores with Sainsbury’s and, whilst the merger is relatively recent, the aim is to strengthen the supermarket’s business and protect their market share.
If you are an online retailer of Electronics and Home products, consider selling on FNAC but don’t ignore Carrefour. Even if you’re not ready to sell on there today, any news of a partnership with FNAC should be the catalyst to tell you that you can no longer afford to ignore Carrefour.
