In the second part in a series of blogs by Azul Partners Chief Research Officer Pierre Mitchell, the role of Amazon and future procurement is examined within the context of a Staples-Office Depot merger.
In part one of the blog series, Mitchell talked about how the merger could potentially change the procurement of office supplies.
In part two, Mitchell turns his attention to Amazon, in particular the newly launched B2B website Amazon Business. As many analysts have pointed out, Staples has claimed that there are plenty of competitors such as Walmart and Costco, plus online competitors including Amazon, Jet and Zoro.
But, according to Mitchell, while Amazon Business is a strong online competitor, it’s really “apples and oranges when you compare the actual market basket of products and value-added services”.
Additionally, Mitchell warned that in the event of a merger, it is unlikely that price savings will be handed down to enterprise customers. “More importantly, it also means many enterprise procurement groups will be scrambling to recompete the business – especially if there’s a price increase that will help fund the synergies promised to Wall Street.
“But since there would be no equivalent national competitor, many Chief Procurement Officers will take a hard look at unbundling and commoditising their market baskets, especially using online competitors for high-volume office supply SKUs, which of course would be music to Amazon’s ears.”
Read the full article on Spend Matters Chief Procurement Officer here.
Part three coming shortly.
Chicago (IL), USA