Two of Europe’s largest electronics retailers have founded a new alliance to pool digital resources and fend off the challenge from Amazon.
Germany’s MediaMarktSaturn and France’s Fnac Darty last week launched the European Retail Alliance (era), a joint venture split into four divisions focused on different areas of activity. The alliance is headed by MediaMarktSaturn’s Chief Procurement Officer Klaus-Peter Voigt.
era Strategic Partnerships will collaborate with manufacturers on developing products and services for customers. Meanwhile, era Sourcing will focus on sourcing products for private labelling, in which a retailer markets a product under their own brand name.
The other two divisions focus on the potential of digitalisation. era Data will harness findings about customer needs to develop tailored offers and look to shed light on why customers prefer particular brands, with the companies planning to co-invest in analytics capabilities.
In addition, the era Innovation arm will see the two retailers looking to support new technologies and ideas in the sector. Fnac Darty will participate in MediaMarktSaturn’s innovation programme, including its Retailtech Hub accelerator, which finds early stage innovations and runs pilots with customers. The Retailtech Hub will start an accelerator programme in France in 2019.
Eventually, the partners plan to open the European Retail Alliance to other market players, although details were not specified.
MediaMarktSaturn in particular came late to online retail, only launching its first online business in 2010. Parent company CECONOMY reported €584 million in online sales in its most recent quarter, up 20.9 percent. In April, MediaMarktSaturn brought its IT and digital activities under the supervision of COO Wolfgang Kirsch.
Fnac Darty, which racked up €576 million in online sales in the first half of this year, appointed a new head of eCommerce in March and has been investing in bringing digital capabilities into its stores.
According to Pieter Hass, CEO of MediaMarktSaturn, the purpose of the initiative is to contend with the digitalisation and “Amazonisation” of the industry.
"Only together can we achieve reach and relevance on a par with the big international players from Asia and the USA,” he said.
Enrique Martinez, CEO of Fnac Darty, said: "For companies today, the customer must be at the focus of all considerations and activities. We must meet the customer’s needs in the best way possible, anytime and anywhere.
“This can only be achieved through close cooperation with manufacturers and brands, with digital innovation being as prominent as the circular economy and after-sales services."
The deal comes as the consumer electronics sector as a whole sees online giants such as Amazon eating up more and more market share.
This is not the first major tie-up between European retailers in the works. Supermarket giants Tesco and Carrefour formally entered into a strategic alliance in August, with plans to begin cooperation in October. The alliance will cover the companies’ relationships with global suppliers, including joint purchasing of own brand products and goods not for resale.