On paper there is great strategic logic for the recent alliance announced between MediaMarktSaturn and FNAC Darty.
The formation of 'era' allows the pooling of scale to drive sourcing synergies at the same time as creating a collaboration to build out digital and analytical capabilities.
This move follows similar partnerships announced by Tesco and Carrefour in recent months, and a wave of retail consolidation that is an inevitable structural response to the twin disruptive forces of channel shift and discounter growth.
But can 'friends with benefits' really ever deliver a compelling enough impact to counter these forces?
Multinational retailers have found cross border synergies infamously hard to deliver - for example if you look at the lengths that Kingfisher have gone through to crystallize these synergies (where the prize has only really begun to materialise once entire buying organisations have been brought together) it suggests looser alliances will deliver only very limited benefit.
So 'era' and other similar alliances may well deliver marginal returns and benefits but to assume this will allow MediaMarkt and FNAC Darty to counter the 'Amazonization' of their markets seems rather wishful thinking.
A more consummate marriage and restructuring is likely to be a pre-requisite to achieve that aim.
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.