Who should Amazon buy…… M&S?

Somehow, M&S have become the high street equivalent of U2. Like the legendary stadium rockers’ seminal The Joshua Tree album, Marks & Sparks used to be relevant.

However, just as U2 had to virtually hack your iPhone to give their albums away, the legendary M&S brand is struggling to break into the modern shopper’s consciousness.

It feels like both M&S and U2 can’t quite manage to capture a new audience, and their old one has either died or started shopping elsewhere.

Over the last 20 years, M&S has launched about half a dozen own-label fashion brands to re-invent its image, but half have vanished and the remaining lines, even their once gold-plated Per Una brand (which used to bring in around £700m at its peak in the noughties) are “under review”.

The new plan is mass branch closures and a rebalancing of M&S as a half-fashion, half-food kind of thing. It’s hard to know exactly what the plan is though, because it seems to change every quarter, when they announce the latest set of disappointing results.

So, when former M&S bigwig Mark East suggested they should consider a tie-up with Amazon, it sounded like nothing more than wishful thinking. And when M&S announced a tie-up with Microsoft to explore a new ‘digital first’ future, it sounded like more of the same. M&S doesn’t just need smarter digital tech, it needs to make up its mind on strategy. And a time machine to find its brand loyal shoppers.

But, then, I began thinking the unthinkable… maybe…

Amazon would actually benefit from a tie-in with M&S. *Gasp.* You see, M&S still has one crown jewel, where a strategic Amazon partnership could be hugely effective, and that’s M&S Simply Food.

To explain why, consider that most pundits are tipping Morrisons to be the next Amazon acquisition. Or Ocado. Possibly both. But Amazon hasn’t bought Ocado. Or Morrisons. And they’ve got the cash, and had plenty of time to do so.

Why not? Well, maybe it’s because they don’t need to acquire Ocado’s delivery infrastructure (let’s face it they’ve already got that covered); and many Morrison’s 490 properties are the kind of big, weekly-shop type of supermarket stores that don’t resonate with modern UK convenience-store food shopping habits.

M&S Simply Food, by contrast, has over 700 convenience stores, mostly in high-footfall locations. Which is where M&S looks really interesting, especially when you consider the expansion of Amazon Fresh and here’s why:

  • Firstly, because according to Amazon’s own data, around a third of shoppers want to touch products before they buy them (and with food, that’s even higher). That means acquiring a network of handy hands-on convenience stores is probably a key part of Amazon’s long-term brick-and-mortar grocery play.
  • Secondly, because it would give Amazon a network of highly accessible click’n’collect locations. We all know that when people come in to collect their clicks, they buy ad-hoc, unplanned stuff. Owning a click’n’collect location is a value multiplier.

Suddenly, M&S Simply Food looks a bit tasty. Amazon doesn’t simply follow the Walmart-style acquisition logic that if you want to sell groceries, buy a grocery store. Amazon’s mission is to be the everything store. Which, interestingly, isn’t a million miles from what M&S tried in the ‘80s and ‘90s, by adding food, home furnishings and financial services to their inventory of underpants and floral print frocks.

M&S and their network of urban convenience stores and rural petrol stations feels ideal for the multi-part, click’n’collect, omni-channel shopping journeys of the modern consumer, whilst grabbing lots and lots of data…

Marks & Sparks could become a showpiece for Amazon Go. A brick-and-mortar extension of the low friction, self-checkout, no queues, Alexa-enabled world of marketplace shopping.

Add Morrisons to handle the dropship wholesale end of it, and you’ve got M&S supplying fresh foods and meal kits to commuters who nip in to collect their Amazon purchases on their way home… and… and… Sorry. It’s a traditional high street retailer, so their approach will more likely be reinventing the wheel (with Microsoft’s help) and taking an also-ran position behind Tesco-Carrefour-Google and Asda-Sainsbury-Flipkart or whatever. Yawn….

I can’t help wondering what the market trader Michael Marks, and his wholesale clerk partner Thomas Spencer would have thought of an Amazon Go tie-up, though. They created the Victorian equivalent of Amazon’s everything store. If only M&S was that innovative today, because one thing we do know about Amazon’s UK grocery acquisition plans, is ……”it still hasn’t found what it’s looking for.”