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Dia to Grow its Partnership with Amazon

Dia is working with online retail giant Amazon to bring its groceries to more cities in Spain through the Amazon Prime Now service. El Economista reports that Dia, which already supplies Amazon Prime Now in Madrid, is hoping to extend its collaboration to other cities, starting with Barcelona where Prime Now is already present.

Amazon’s rapid 1-2 hour delivery service in Madrid is supplied from a single Plaza supermarket, a Dia format that has a strong focus on the fresh category. Now the retailer says it plans to grow with Amazon to supply groceries to more cities across Spain.


Opinion

If You Can't Beat Them, Join Them!

It seems to be the motto for some physical retailers. In its bid to build a convincing grocery offer for Amazon Prime Now and Amazon Fresh, the online giant is cooperating with bricks and mortar retailers in most countries of operation. Price competitive private label lines are needed to bolster its ambient, fresh and frozen assortment as shoppers do not want to buy only branded items. In Germany Amazon cooperates with Tegut and in the UK it has a supply agreement with Morrisons. The latter cited this as a highlight of its latest quarterly results, driving additional growth for the retailer. Dia is most likely enjoying similar benefits, as proven by the widening of its partnership to reach Spain's second largest urban area, Barcelona. 

But isn't striking deals with Amazon a short-sighted move for bricks and mortar retailers? The retailer already works directly with branded manufacturers and recently in the US developed a Wickedly Prime range of private label grocery items. Now with its acquisition of Whole Foods the retailer is clearly operating independently in the grocery space and therefore less likely to need to partner with third parties in the mid to long term.

So yes, in the meantime Dia can enjoy the additional volume and gaining access to new clients by becoming an Amazon supplier. However, the retailer also needs to think about its longer term strategy. The question will be whether or not Dia can align its own e-commerce proposition, currently rolled out to major Spanish cities and nearby provinces, to meet the high levels of shopper expectations that its new partner Amazon is setting in terms of service and convenience.

With contributions from Senior Retail Analyst Lisa Byfield-Green
Topics: Amazon Dia