If you read the news in e-commerce, you may know that retailer Nordstrom is considering the purchase of Trunk Club, a company focused on delivering hand-selected merchandise to shoppers based on their personal style and preferences.
Nordstrom has also recently purchased other small businesses including Hautelook and others. But they aren’t the only large retailer that is acquiring smaller ones. L’oreal purchased Urban Decay and many more are happening daily. Retail experts are trying to predict the next acquisition. For instance, should Amazon acquire Sears?
What Does the Buyer Get?
Why do acquisitions happen? Typically, when the company offers something that is too expensive to replicate or build in house. Nordstrom in this case is considering purchasing the technology, the customer base and loyalty of Trunk Club customers. In addition, they will get the benefit of all of that Trunk Club data which provides an introduction to future customers for products and services both in-store or online.
Challenge for Smaller Businesses
As large retailers like Nordstrom acquire smaller companies, data and technologies, smaller companies will find themselves with ever-growing challenges. As the market actively grabs expensive UI designers, online marketers and big data technologists to help them improve their customer experiences, smaller companies must respond by becoming more customer-centric, product focused and clever in their go–to-market strategies. Creative marketing, excellent customer service, an authentic social mission and the acquisition of more sophisticated tools on the open market can level the playing field. Lacking these, at least small companies can hope for one thing – that a giant like Nordstrom or Amazon will be willing to acquire them.