Amazon has sent shockwaves through the food retailing business with its near $14-billion acquisition of natural and organic food chain Whole Foods.

The move has dominated the financial news over the past three days and has been called a game-changer for the food retailing industry, but could there be wider ramifications for the business supplies industry? We suggest a few things to think about…

Whole Foods locations could be used as collection points for Amazon online sales, providing customers with more delivery options.

Whole Foods stores could act as local distribution hubs for fast delivery, two hours or even less, and give Amazon a stronger last-mile delivery presence.

Amazon’s move could have a disruptive effect on the wider food retailing industry. There is already speculation about the need for accelerated consolidation in the mass and grocery sector, and if that happened that would affect vendors that sell into these retailers.

Amazon has been testing more consumer-friendly retail concepts, such as its Amazon Go initiative where customers just pick items off shelves without the need to go through a checkout. Acquiring Whole Foods will give it a wider test platform and could lead to faster adoption of some of these shopping innovations as well as speeding up digital transformation in the retail sector in general.

We have previously downplayed the idea of Amazon acquiring retail locations in the business supplies channel because there was no indication that it would make a significant move into the retail space. That has now changed, and the Whole Foods deal validates Amazon’s belief in an omnichannel experience that combines the digital and physical worlds.

Could this mean that Amazon now looks to acquire retailers in other business segments, such as office supplies, and that Staples or Office Depot’s stores could be on the Amazon radar? Possibly, especially if Amazon is not happy with the way that Amazon Business is growing; it hasn’t updated its customer and sales figures on Amazon Business in the US since April 2016. Is that because the growth rate has slowed and it’s not getting the traction it thought it would after Amazon Business’ initial success?

The Whole Foods acquisition is reportedly being driven by difficulties Amazon was having in growing its Amazon Fresh grocery delivery business. If Amazon Business is stalling or not growing fast enough, then why wouldn’t Amazon look at buying growth? We now know that this strategy is part of Amazon’s playbook.

By Andy Braithwaite for OPI.net

 

When you need to buy a new kitchen gadget, a designer lipstick, a branded razor, a calendar and that vital cable for your television — what’s the one easy place you can turn to?

That’s right, there isn’t one in Australia. You’re facing hours going shop-to-shop, picking up second-rate products from a local mall or ordering from various websites with delivery fees on each item and mixed rules on returns.
Amazon is the game-changer our retail landscape needs, one that transformed shopping in the UK and US years ago. Despite the hand-wringing from the retail sector that has dominated reporting on the online giant, this is mostly good news for the consumer.
You will be able to buy what you want, when you want it. It will typically be affordable. Existing brands will have to work harder to compete. It will be the arrival of Uber, or Aldi, all over again.

I lived in the UK more than four years ago, and buying books, travel accessories and homeware couldn’t have been easier. Every Christmas now, I log on to Amazon and select the perfect toiletries, chocolates, booze, games, DVDs, hiking gear and toys that I want for all of my relatives, adding wrapping and a message where needed. It’s the work of minutes.
In the four years I’ve been in Australia, waiting for Amazon, the company has grown enormously, and it’s in fashion that investment bank Morgan Stanley now sees the biggest threat.

Its report “The Amazon Effect in Australia” says $800-million will be wiped from the earnings of chains including JB Hi-Fi and Harvey Norman, but the single biggest impact will be on Wesfarmers. The nation’s largest retailer, which owns Target and Kmart, could lose more than $428 million in earnings by 2026.
The report said department stores would be the sector worst hit, as Amazon generates up to $12 billion in sales by 2026.

Online retailer Catch Group this week announced it is having a makeover to ensure it becomes number two in Australia after Amazon, rebranding Catch of the Day as Catch.com.au and turning it into a marketplace.
Amazon Fresh will take on the grocery sector, and it is aggressively building its Amazon Prime video membership service, making inroads into streaming and refusing to stock Apple products in favour of its Fire TV sticks. Amazon entered the Artificial Intelligence field in 2014 with its Alexa speaker. This week it emerged that its shares (and those of Google) have just reached $US1000, putting them in an elite club of mega-companies.

In December, it opened the first Amazon Go store at its Seattle headquarters, a convenience store with a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines.

Australians haven’t migrated to online shopping in the landslide once predicted. Figures released by the National Australia Bank last week showed the Online Retail Sales Index — a measure of spending on retail goods — fell by 0.8 per cent in April. But even if you prefer to visit a store and try clothes on, it’s being able to get those small essentials without the painful search that will hook you in.

And Amazon is moving offline, too. In December, it opened a prototype Amazon Go grocery store at its headquarters in Seattle, Washington, which uses a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines. The eCommerce giant opened its first physical bookstore in New York last month — its seventh in the US. Amazon Books, like the Go store, does not accept cash, with Prime members using the app on their smartphone to pay and non-members using a credit or debit card.

Maxim Group today predicted a future in which Amazon will run everything from petrol stations to credit lines, Dow Jones reports.

“Consumers will be able to save money at the Amazon gas station because they belong to Amazon Prime, much like Costco members today,” said Maxim’s Tom Forte. “They will also be able to pick up and return their merchandise ordered online at the Amazon gas station.”

They’ll book their travel on Amazon, and have the firm send their suntan lotion ahead to the resort so it’s there when they arrive, he added.

But just as with Uber and co, there are serious questions over Amazon’s omnipotence. Critics say the retailer has a monopoly and is destroying small businesses — book stores, boutiques, grocery stores. There are also questions over how it pays tax.
There have been regular accusations that the company mistreats workers, with reports in December of “intolerable conditions” at a Scottish warehouse, with badly paid staff forced to sleep outside in tents to save on commuting costs.

A Sunday Times investigation found temporary workers at the warehouse were being penalised for taking sick leave and put under immense pressure to hit targets, and that water dispensers were often empty despite the intense physical nature of the job. Unions said workers were falling ill from overwork.

In the US, where Walmart is buying up smaller online retailers as it battles to compete with Amazon, there have been dozens of stories about inhumane conditions at its warehouses. But workers who spoke to Mental Floss in 2015 said conditions were relatively typical for warehouse work. In 2012, after an expose on the searingly hot summertime conditions, Amazon announced plans to spend $52 million to install airconditioning.
The company is now recruiting for hundreds of jobs in Australia as it prepares for its highly anticipated debut. It has broadly positive reviews on job sites Indeed and Seek, although there were complaints about difficult management, tough targets and short lunch breaks.

Amazon is a massive tech corporation and — mirroring Facebook, Apple and Google — there are justified concerns over its practices and treatment of employees as it grows.
However, it is time Australia caught up with the rest of the Western world and actually knew what those were.

By Emma Reynolds for www.news.com.au

Queens speech delayed by stationery

Traditionally, the U.K. Parliament starts off every year with a speech by the current monarch, which outlines the direction the ruling party wants to take the government.

But the queen’s speech might get delayed this year — and the government says paper is partially why.

Turns out the queen can’t just print out her speech on a few sheets of A4. It has to be written on special goatskin paper — which, despite the name, doesn’t involve actual goats.

The special paper ensures the speech will last longer in Parliament’s national archives — but it also means the ink will need a few days to dry.

Normally this isn’t a problem because both major parties already know what they want their government to look like. But the surprising election results have forced the ruling Conservative Party to negotiate with a regional party in Northern Ireland to maintain its majority.

Those talks are still going, which means it’s too early to start putting a government together on paper — at least, on archival goat paper.

What is goatskin paper?

Goatskin paper is a thick and ornate parchment on which the Queen’s Speech is written.

While it was traditionally made from real goat skin, its modern form contains no animal hide at all.

But it keeps its name because it has a watermark in the shape of a goat.

Westminster veterans still refer to “going goat” to mark the moment the Speech needs to be ready by so that the ink can have time to dry before being sent to the Queen for her approval.

Why is it used in the Queen’s Speech?

The posh paper is used for the special occasion of the State Opening of Parliament.

On it is written the Queen’s Speech, which sets out the Government’s plans and legislative priorities for the year ahead.

But after the 2017 snap election led to a hung Parliament, it was reported that Theresa May would push back the speech from the original date of June 19.

It was thought she needed time to organise a deal with Northern Ireland’s DUP to support the Conservatives in a minority government in case they made ultimatums over Tory policies.

By Neal Baker for The Sun; and Matt Picht and Katie Link for www.abc2news.com

Following years of government budget cuts, parents are now turning to crowdfunding Web sites in order to provide basic school supplies.

Appeals have been launched on websites including Justgiving.com for online donations towards items such as whiteboards and computers, as well as to pay for crossing attendants.

These include one for Camelsdale Primary School, which set up a page to raise money for a replacement whiteboard.

The drastic measures are being publicised by the National Union of Teachers (NUT), who have set up a ‘School Cuts’ website which shares details of the more than 18,000 schools that could face further cuts.

The website contains a tool with which people can check how their school will be affected, while urging voters to petition their local MP candidates to oppose more cuts before the election.

The project, which is also backed by NAHT, The Education Union (ATL) and GMB, also forecasts the future for UK education and claims that by 2022, 93% of schools will have per-pupil funding cut.

According to the National Audit Office, the Tory pledge to inject £4bn into education, thus changing the funding formula, could actually result in 9,000 schools facing more cuts.

In a blog, the Department of Education deny claims made in a report by the Institute for Fiscal Studies (IFS) that schools are not protected from further funding cuts.

They state: “That is not true – we have protected schools from losing more than 3% per pupil and that protection is guaranteed for the lifetime of the formula.

“[…] Indeed, there has been a substantial increase in school funding over the years.”

Basing findings on a National Audit office report into school financial sustainability, a spokesperson writes: “The government has protected the core schools budget in real terms since 2010, with school funding at its highest level on record at more than £40 bn in 2016-17 – and that is set to rise as pupil numbers rise over the next two years.”

Prime Minister has echoed this claim several times, stating in an interview with Andrew Marr: “The level of funding going into schools is at record level.”

However, Professor Sandra McNally from the School of Economics, University of Surrey, published an article​ fact-checking this “highest level on record” claim.

She explains that only the “per pupil expenditure” (the amount spent on each pupil) is relevant, rather than the total amount of money available.

According to Professor McNally, current spending per pupil was “largely frozen in real terms” between 2010 and 2016.

And as onward spending is frozen in cash terms, this will likely lead to a “real terms reduction of around 6.5 per cent by 2019-2020”.

She explained this would, in reality, be a real-term fall in per-pupil spending – the biggest in 30 years.

“Theresa May’s claim is misleading because it omits important information,” Professor McNally concluded.

By Harriet Marsden for www.independent.co.uk

Americans start their back-to-school searches in July, despite the fact that schools won’t open for two more months.

Here’s why: it’s the second-biggest shopping holiday of the year.

The second biggest — who’d have thought that, right? Back-to-school spending is second only to the December holiday season.

Research shows that families with K-12 kids spend an average of $674 on the hottest sneakers, fashion trends, electronics, calculators and binders — and even more money for college-bound students.
In fact, according to the National Retail Federation, in 2016 back-to-school spending hit $75.8 billion. (Can I hear a collective “ouch” from all the parents out there?)

Which means for digital marketers, planning needs to start now. Below you’ll find two assignments (plus helpful insights) designed to help you move to the head of the class this back-to-school season.

Assignment #1: Find out who’s buying and plan your bid modifiers
Increased traffic means you need an increased budget. And to maximise those budget dollars, you first need to know exactly who you’re targeting and then build meaningful campaigns.

According to research done by my colleagues at Bing, 32 percent of back-to-school shoppers are aged 35 to 49, and 31 percent are 50 to 64, with the primary customer being female and a mom.

But don’t forget — although mom may be footing the bill, her K-12 kids are dropping not-so-subtle hints about what they want.

On the other hand, college freshmen outfitting their dorms are relying on Mom and Dad to guide their decisions. It’s critical that you segment your audiences with demographic targeting, keeping in mind key influencers.

This means that you’ll need to create a separate set of ads to attract each of these different segments. Thankfully, with demo-based bid modifiers offered by search engines, you can make your ads feel more personalized.

In addition, make sure you’re segmenting by geography as well, so you can optimize not just based on season and local trends but also based on peak periods for each location.

As always, don’t forget to look at last year’s performance data, to help you optimize this year’s campaigns.

Extra credit: Be there for teachers

Teachers are unsung heroes who invest heavily in the next generation — often with their own hard-earned money. Thanks to increasingly tight school budgets, most teachers spend an average of $500 on their classroom, and some teachers report spending $1,000 or more.

Consider donating classroom items or a percentage of your sales to local schools or even offering a buy-one-give-one promotion. Calling out these promotions in your ad campaigns will encourage customers to shop with you, trust your brand, and feel good about their purchases.

And you can feel good about helping teachers.

Assignment #2: Determine what they’re searching for

Of course, for campaign success, you need to know what your shoppers are looking for. And the answers are all in the data.

Take time to examine trends related to your products and uncover the top-searched terms, as well as the days and times folks are looking.

For example, thanks to Bing data, we know that the most popular back-to-school search category is apparel (shoes and clothing), at 58.5 percent, and click-through rates are high in July and August.

So, for these months, consider optimizing your shopping campaigns with enhancements such as merchant promotions, sale pricing and review extensions, as well as highlighting local inventory.

Oh, and by the way…

Sometimes back-to-school shoppers are searching for what we don’t really expect, such as bed and bath products. Searchers on Bing (as compared to Google searchers) are 16 percent more likely to have spent between $200 to $499 on bed and bath products in the last six months. Optimizing for these products could yield some sweet-smelling profits.

Technology is also a big back-to-school category, and we know that these shoppers do plenty of online research before committing.

Running ads for searches higher in the purchase funnel can be very effective in these cases. For example, an ad for a tablet early in the shopping season may use unbranded search terms and include more detailed ad copy as well as review extensions. But an ad for that same tablet later in the season may have less detail but would also include branded search terms.

Speaking of brand, how does brand vs. non-brand factor in?

Below I’ve highlighted a few search stats and tips from Bing that indicate clear trends in some key back-to-school categories.

Clothes

72 percent of searches were for unbranded terms.
Top unbranded searched terms: t-shirts, shirts for teen girls, and cute plus-size outfits
Tip: Including an ad showing the product in use or multiple colors of the item can help the image grab attention.

Laptops & tablets

76 percent of searches were for unbranded terms.
Top unbranded searched terms: best deals tablets, tablets and best tablet deal
Tip: Influence shoppers with customer reviews using a review extension, and if your product is on sale, be sure to use the sales price column in your product feed.

School supplies

81 percent of searches were for unbranded terms.
Top unbranded searched terms: calculator, scientific calculator, portfolio
Tip: Consider offering a coupon and try a broad match modifier for unbranded terms.

Furniture, décor, and bed & bath

88 percent of searches were for unbranded terms.
Top unbranded searched terms: furniture, furniture stores, mattress stores, memory foam mattress
Tip: Personalize what shows in your ad with dynamic text parameters. Showing the product in use, e.g., a rug shown on the floor of a room, can be especially helpful for this category as it provides context to the shopper.

Boost your popularity: Discover where your audience is hanging out
Did you know that back-to-school shoppers plan to purchase from only an average of three websites? Finding out where your customers are spending time online (and where they’ll make their purchases) is critical to getting your campaigns in front of them.

You can also maximize your marketing ROI by syncing your ad investments with other campaigns. Now that you have your assignments, it’s time to kick campaign planning into high gear, so you can edge out your back-to-school competitors.

By Purna Virji for www.searchengineland.com

Staples moves away from office supplies

Staples is overhauling its marketing as part of a high-stakes pivot away from what it was built on — selling low-priced office supplies at big stores.

The rebranding campaign kicks off next week with nationwide television commercials in which stores are nonexistent and products are only shown in passing. There’s no mention of discounts either.

Instead, the spots star and extol office and building managers as they fix copy machines, clean up spills and restock the breakroom — all with the help of Staples’ delivery business. These are precisely the workers the company sees as crucial to its revival from years of falling sales because they make the purchasing decisions for more than a million U.S. small businesses.

“We wanted to tell a new Staples story,” said Frank Bifulco, the company’s chief marketing officer. “It’s going to convey to all audiences that Staples is much more than a retail office-supply company.”

After U.S. regulators blocked the company last year from buying smaller rival Office Depot Inc., Staples shifted from consolidation mode. Instead, it began to aggressively pursue customers in the $80-billion-a-year U.S. midmarket — or businesses with fewer than 200 employees. Staples currently has less than 5 percent of that market. The plan includes adding 1,000 people to its sales staff, acquiring regional distributors, and offering memberships and services to make office and facilities management easier.

This is all part of the company’s push to expand its delivery business, which offers customers a sales representative and online ordering. This division was already generating more revenue than the brick-and-mortar stores, which have struggled as more consumers shop online. Staples, based in Framingham, Massachusetts, still has about 1,500 locations, but continues to pare down that the number.

While delivery has been a key part of the company’s history since 1993 — just seven years after Staples was founded — it’s barely been mentioned in advertising. The focus has always been the physical store, but that’s not where the company sees its future. By 2020, it expects only 20 percent of revenue to come from retail locations — down from about 40 percent now. The rest will be generated by delivery and online sales.

Having the delivery unit already in place gives Staples a concrete way to veer off the dubious path that many of its retail peers are headed down. The company wants to be seen as a business-to-business “solutions partner” that “makes the workplace work,” Chief Executive Officer Shira Goodman said in an interview earlier this year.

That’s reinforced in the commercials, with the new corporate slogan “It’s Pro Time” replacing “Make More Happen.” One 30-second spot portrays office and facilities managers taking pride in their work as the voice-over says, “It’s not always easy to summon your pro, but once you’ve found it, you’ll find you can do anything.”

That theme will be woven into the company’s back-to-school shopping campaign — with moms being treated as the pros, Bifulco said.

The campaign, crafted by ad agency MRM/McCann, also marks a tonal shift from the silliness that permeated Staples marketing for years. That history has included ads featuring ink fairies, robot love triangles, riffs on “The Sopranos” and a guy walking around the store absurdly yelling, “Wow, that’s a low price!”

“Levity has been part of how we communicated and we’ve done that extremely well on occasion, and other times we kind of did not,” Bifulco said. “We have moved away from that. We’re honoring and celebrating work.”

By Matt Townsend for www.providencejournal.com

Office Depot sells off Korean business

Office Depot has closed on the sale of its business in South Korea to private equity firm Excelsior Capital Asia.

Office Depot had previously disclosed its intention to sell the majority of its international businesses under a process that began in 2016.

“This transaction follows on the recently announced agreement to sell our businesses located in Australia and New Zealand,” Gerry Smith, CEO of Office Depot. “We are now one step closer to achieving our goal of divesting substantially all of our international businesses in order to focus on the growth opportunities available in the North American market.”

Excelsior Capital Asia is described as a Hong Kong and South Korea-based direct investment firm.

Source: www.stationerynews.com.au

Record numbers for London Stationery Show

The London Stationery Show is held annually during National Stationery Week in the UK.

The seventh London Stationery Show closed its doors last week after recording its highest ever visitor numbers.

Visitors were up 9% on 2016 with registered attendees from 43 countries.

The show, which was purchased by Ocean Media Group last year, has seen consistent growth in the number and size of stands being requested by exhibitors and this year more than 160 exhibitors and 300 brands were represented. at the show. The show recorded the highest number of entries for its Stationery Awards, which this year topped just over 400.

“The show continues to grow and attract more support from the industry and interested buyers. We’ve had an excellent response from exhibitors wanting to book for next year, and strong interest in our new show, which will be based in Manchester,” Tim Willoughby, managing director at Ocean Media Group, which also owns the National Stationery Week program.

This year’s show, held at London’s Business Design Centre, introduced a LaunchPad competition to help aspiring stationery designers and companies get started in the industry. This resulted in 12 winners being given free stands at the show.

The 2018 London Stationery Show will be held on 24 to 25 April, 2018.

Source: www.stationerynews.com.au

Is Le Pen about to Trump France?

As France undertakes its general elections this week, the world’s eyes will be on Marine Le Pen as concern grows about the future of the European Union (EU). Lingering insecurity, especially in the wake of the most recent terror attack on police on the Champs-Elysees in Paris, will have a marked effect on voter sentiments in one of the founding members-states of the Union. EU-critics will see this as the inevitable result of the EU’s failed integration policies.

While it is impossible to predict with certainty which candidate will win the French election, it is useful to consider the cascading events that will transpire should Le Pen be given the opportunity to implement her program of protectionist nationalism in France. The Front Nationale’s policies of border closures, an anti-Islamic religious clampdown and their France first economic policies, reminiscent of US-president Donald Trump’s populist campaign, will send tremors through the very fiber of European civilization. The EU’s tectonic plates will shift.

In our analysis there are four major tipping points that will shape the EU in the next decade, should Le Pen be victorious. Our assessment is that the French people will be less conservative than the Dutch, who pulled the Netherlands back from the brink of Geert Wilder’s brand of Islamophobic nationalism. This is certainly not a preferred scenario for EU supporters, but contemplating a worst-case scenario is useful in sensitizing one to the strategic alternatives.

Watch out for; the end of war in Syria and jockeying for political influence in the region, contagion from conflict in the South Caucuses and the militarization of the Black Sea, Turkey choosing to, or being asked to leave NATO, and the weakening of the Euro in the wake of a so-called “reform” of the European Central Bank (ECB).

End of War in Syria and Jockeying for Political Influence

As backdrop to the French political process, there is an uptick in American interventionism in Syria. It is conceivable that the US, with their NATO allies including Turkey, will want to dictate the terms of a post-war settlement in Syria. Protracted negotiations between factions will surface a contentious Turkey-Russia-Iran-Egypt nexus of growing influence in the region. The Americans will not be pleased, and will look to Turkey’s European neighbors, to assist in pressurizing Istanbul to take a position that is more friendly to their regional interests and ally, Israel. Turkey will refuse. The absence of the lure of potential EU membership, growing authoritarianism from the regime of Turkish President Recep Tayyip Erdogan, and an unexpected improvement in Turkish-Russian relations, will muddy the waters in Istanbul’s working relationship with Washington.

Turkey will calculate that Europe’s gas-dependence on Russia, via the Turkish Stream, gives them leverage and puts them in a strong position to make demands that serve their interests. President Erdogan will flirt with the idea, that in the absence of President Bashar Al-Assad in Syria, he can play a more prominent leadership role in the Arab world. In December 1997 President Erdogan is quoted as having recited a Ziya Gökalp’s poem saying of Islam, “The mosques are our barracks, the domes our helmets, the minarets our bayonets and the faithful our soldiers…” Drawing on this militant theocratic worldview, Turkey will choose realpolitik and prestige over democratic constitutionalism in their sphere of influence.

Contagion from conflict in the South Caucuses and the Militarization of the Black Sea

Growing tensions in the South Caucuses will accelerate the militarization of the Black Sea. This will not sit well with Germany, who will be pressed upon by Romania and Hungary to exert pressure on the Russians and Turkey by increasing their military presence. As a former close friend of the US under Obama, a newly elected Angela Merkel will be reluctant to mobilize her weakened coalition, and risk protracted conflict. The unease of these two tipping points will place strain on NATO members who would already be contemplating the fallout of the potential collapse of the EU. US President Donald Trump’s incoherent foreign policy approach will not help the situation.

When Sweden and Finland leave the EU

Wanting to avoid fiscal contagion from the aforementioned conflicts through their EU membership, Sweden and Finland will try and renegotiate their position to something that resembles that of Norway. Germany will be faced with a conundrum – still reeling from zero-sum negotiations with the UK, and having to make the choice between playing hardball with northern European member-states on the basis of principle, or accepting the inevitable and undermining their own arguments in favor of the EU. The German people will be fed-up and decide to cut their losses and want abandon the EU project. Watch for a call for a referendum on the EU by Angela Merkel.

When Turkey leaves NATO

Turkey will increasingly find it difficult to assure their NATO allies that they will act in their interests should an all out conflict erupt in the region. Making the counter calculation, that the US and European countries will not come to their rescue either, and in the absence of a large-scale threat from Syria, Turkey will opt to leave NATO. Russia and Iran will see this as an opportunity for consolidation in the Middle East, looking to Egypt to pivot in their direction. Israel will be dismayed at an escalation of an already volatile security environment as a consequence. The 1950s Egyptian revolutionary president, Gamal Abdel Nasser said of the Jews, “you will never be able to live here in peace, because you left here black but came back white.” Turkey’s abandonment of NATO will remind the Zionists of Nasserims blasé bigotry and the unraveling of the Bagdad Pact in 1979.

ECB Reform and the Weakening of the Euro

The remaining members of the EU will by this time be pushing for wholesale “reform” of the ECB, in favor of less fiscal conservatism. Global financial markets will likely overreact looking to the dollar, yen and yuan as havens in the medium-term. The Euro will weaken considerably, though not collapse, now entrenched as the currency of choice for global trade with Germany.

Taking the long-view of Europe, what surfaces is the continent’s unresolved relationship with both fascism and Islam. In a twist of great irony, author Kevin Coogan quotes a friend of Adolf Hitler, Ahmed Huber as recounting the fürer as having said, “the only religion I respect is Islam. The only prophet I admire is the Prophet Muhammad.” Hitler’s sentiments are obviously not shared by the fascists who now threaten to redefine the essence and contours of the EU and Europe. It remains up to the French electorate to decide how they navigate the insecurity of this political moment. Whether or not they remain loyal to their secular, tolerant and democratic roots will have far-reaching consequences for the next half-century.

By Marius Oosthuizen for www.thoughtleader.co.za

Is Amazon under-valued?

Amazon is one of the largest companies in the world, but its valuation leaves plenty of room for growth. The stock’s valuation multiples don’t do justice to the growth prospects of this e-commerce giant.

Amazon experiences 27% year-on-year sales growth and this growth profile is simply too good for a company trading at only 3,2-times revenue.

Relatively weak operating margins have long been a roadblock for Amazon. But massive growth in both sales and margins in Amazon Web Services (AWS), as well as the growing dominance of Amazon Prime in the US, mitigate such concerns and make a strong case for undervaluation in the equity.

Amazon’s international segment currently operates at negative operating margins. However, the trend looks set to reverse as Amazon Prime penetrate these markets.

Future growth

Amazon’s primary top-line growth factors are international expansion and Amazon Web Services. AWS will improve overall margins, but international expansion is still in a negative margin situation. The trends have exacerbated in 2016.

In the full year 2016, North America represented almost 60 percent of total revenue while international and AWS represented roughly 30% and 10%, respectively. There is room for growth here, and it isn’t unreasonable to expect Amazon to be able to replicate North American success in other developed regions of the globe.

Source: www.seekingalpha.com

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