Amazon has many opportunities for growth through acquisition.
While Amazon has recently received a lot of reviews for its $3.9 billion purchase from healthcare provider One Medical, there are still other potential acquisitions that could have even more impact. Here’s a look at why Amazon can benefit from buying Twitter, Kohl’s, and/or Wayfair.
The chances of Elon Musk acquiring Twitter seem to be getting smaller by the day. A deal for the richest person in the world buy twitter for $44 billion which was announced to much fanfare in April 2022 is now heading for a legal battle. Musk said he was ending the deal in Julyand the end result will most likely involve Musk paying some type of settlement to walk away clean.
Assuming Twitter stays out of Musk’s control, this may represent a good buy for Amazon, although it would likely eclipse the price Amazon has paid for any previous acquisition. Although the online retail giant has social gaming platform Twitch and a live shopping network, it lacks a full-fledged social network as part of its increasingly diverse portfolio. .
Owning a social network would help Amazon balance the competition with rival tech giants such as Facebook and Google (owner of YouTube). And Twitter fits well into Amazon’s online retail landscape, with social commerce efforts including beta testing a new offering called Twitter Shop, which will allow retailers to curate a collection of up to 50 products to showcase to customers on their Twitter profile.
the current Twitter shop module, originally piloted in July 2021, allows merchants to feature up to five products directly on their profile. Other recent e-commerce efforts by Twitter include the Debuts in November 2021 of a US retailer’s live shopping event, a 30-minute live shopping event hosted by Walmart during Cyber Week.
The idea of Amazon buying the struggling department Kohl’s has been floated in recent years. This makes sense from multiple angles – Amazon and Kohl’s have a level of existing supply chain integration due to Kohl’s in-store Amazon return stations, and getting a physical store fleet would reduce the advantage of Walmart’s supply chain by using local stores to fulfill online orders.
Additionally, Kohl’s was openly considering a sale as recently as June 2022just mute outlook for the 2022 financial year and saw a number of C-level executives have left in recent months.
However, the recent launch of Amazon Style The high-tech clothing store format, designed to combine the personalization of e-commerce with the immediacy of physical shopping, creates another potential reason for Amazon to buy Kohl’s.
While Amazon would likely continue to build new Amazon Style stores and maintain the Kohl’s brand, it could equip select Kohl’s stores with the digital self-service technology used in Amazon Style, similar to how it includes features found in its Amazon Fresh high-tech grocery chain. at select Whole Foods stores.
Home furnishings is a unique and very demanding retail niche. Products are large, often require specialized shipping and assembly services, and orders can take months to fulfill, even in times of peak supply chain performance.
Direct-to-consumer giant Wayfair was the number one homeware retailer by market share (by total revenue) in the second quarter of fiscal 2022. However, the company still saw significant declines active customer base, earnings and sales during the quarter.
Wayfair has the infrastructure and niche-specific know-how for direct-to-consumer furniture retail, which Amazon could incorporate into its finely-tuned e-commerce operation. Amazon could maintain Wayfair (and perhaps all or part of its portfolio of retail brands), or simply use it as infrastructure for “Amazon Furniture”. Additionally, Wayfair has began to expand in brick and mortar space.