The partnership makes sense for both partners as many grocers need the expertise offered by technology partners to set up efficient and digitally advanced operations and technology players can build off of the logistics expertise, supplier relationships, and distribution networks. Historically, many retailers trying to be pure online players haven't had much luck earning profits from storing and delivering food - especially in markets like the UK. Because grocery is such a high frequency purchase for consumers, establishing a logistics path through which other categories can eventually be targeted is key. Food purchases make up from one third all the way to half of all spending in numerous developed countries.
Here are some of the other recent partnerships between grocery retailers and technology companies.
- Kroger seals warehouse deal with Ocado
- Walmart pays $16 billion for 77% stake in Flipkart
- France's Monoprix agrees to sell groceries via Amazon
- Carrefour struck a deal with Tencent
- Amazon buys Whole Foods for $13.7 billion
- Walmart buys ecommerce start-up Jet.com
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