According to Bain & Co. classic sales models are set to be overtaken
As a result of the Covid-19 pandemic, major retail players are expected to draw on the high levels of accumulated cash to close new Merger & Acquisition deals in 2023, taking advantage of industry multiples at their lowest in the past decade.
As traditional business slows down, retailers will need to push beyond classic sales models, moving to "beyond-trading" solutions. This is believed to become the main driver of M&A in the retail sector for the next few years, rising to account for up to 40 percent of value and more than half of industry profits.
These are some of the insights from Bain & Company's fifth annual Mergers and Acquisitions Report, in the retail sector section.
"In many ways, the rapid evolution of the retail sector is confusing. Traditional retailers seem to be investing more and more aggressively in digital, while new digital players are competing to learn the more traditional capabilities developed over time by the incumbent industry leaders. All this is happening in a market environment characterized by uncertainty and at a time when the industry's profit pools appear to be on the verge of dramatic changes due to the growing importance of non-trading activities", explains Luigi Do, Partner at Bain & Company.
