Accenture hits acquisition trail again, focuses in on retail and customer experience

Profile picture for user ddpreez By Derek du Preez August 18, 2015
Summary:
Accenture has been buying up firms that fill out its digital services capabilities. And it doesn't seem to be showing any signs of slowing down anytime soon.

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Accenture has been acquiring firms at pace in recent months, as it bolts on companies that align with its strategy of doubling down on certain verticals and digital transformation services. And it doesn't seem to be slowing down anytime soon.

Just last month we reported on how Accenture had completed its third acquisition in under five weeks, buying up Austin based design company Chaotic Moon, which it was adding to its growing suite of marketing and digital services.

We noted at the time:

This acquisition trail perhaps shouldn’t be too much of a surprise given that Accenture’s second quarter numbers for this year showed that digital services are growing at a rate of 20% and now account for a fifth of its total revenues.

And following a couple of other acquisition announcements this week, Accenture is continuing to dig deep into its pockets to snap up firms that consolidate its position in this market - albeit with more of a focus on the back-end this time around.

Yesterday the company announced that it has acquired Total Logistics, an independent and supply chain consultancy based in Wokingham in the UK, which it said will add to its supply chain capabilities and provide Accenture customers with “interactive shopping experiences on any device at any time”.

Unsurprisingly, the Total Logistics has a strong retail and consumer goods focus, which are both areas where digital spend is particularly strong. But Accenture said that the company will become part of its Consulting arm and as a result its capabilities will be extended to other industries that include life sciences, automotive and industrial equipment.

Total Logistics' niche essentially lies in helping companies optimise their distribution networks and improve their performance in the supply chain.

Lucy Larkin, managing director in Accenture’s Retail practice in the UK, said:

Consumers’ expectations to shop using any channel they choose and still get fast and reliable delivery poses logistical and financial challenges for retailers.

“In this environment, it becomes critical for retailers to transform their supply chain models to enable a more real-time, digitally enabled service. The acquisition of Total Logistics ensures that we are well-equipped to help our clients achieve better business outcomes from their digital transformation programs.

Some of the clients listed on Total Logistics' website include Adidas, Nestle, Haribo, Unilever, Tesco and Wella.

Andy Keith, the managing director of Total Logistics, said,

Total Logistics has more than 25 years of experience working with clients on strategy, design and implementation in the supply chain and logistics sector. As part of Accenture – with its broad industry skills and global reach – we will be able to help clients transform their businesses and make sure they are prepared to better serve their customers both now and in the future.

Angela Eager, research director over at TechMarketView, rightly notes that this acquisition complements another recent buy of Accenture's – Javelin Group - which was picked up back in May and is described as a UK-based “retail strategy consulting and digital transformation services provider”.

Accenture said at the time that Javelin offers a range of strategy services that include digital market assessment and potential evaluation, digital performance improvement, omni-channel retail planning, retail analytics, supply chain fulfilment and operations, as well as location and international expansion strategy.

Javelin's client list includes Asda, Tesco, Waitrose, Argos, M&S, John Lewis, Harrods, ASOS and Nike.

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On the Total Logistics and Javelin Group buys TechMarketView's Angela Eager commented:

This fits with Accenture’s industry-led go-to-market approach and also provides it with more capability to tackle the back end of customer experience delivery. Areas such as the supply chain are not as widely addressed as the more obvious customer facing ones but play a crucial part in delivering on digital transformation and a positive customer experience.

“This is the second recent UK acquisition covering the supply chain/logistics and retail/consumer space – in June Accenture acquired Javelin Group, a specialist in retail strategy consulting and digital transformation services. Retail is one of the lead sectors in terms of digital adoption so it makes sense for Accenture to be investing here.

My take

Accenture was quick to recognise that the popularity of outsourcing everything was quickly dwindling and that the creativity, agility and competitive edge that digital can bring would soon be a top priority for customers.

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It seems to be taking this seriously and is snapping up smaller firms at a rapid rate, whilst keeping them at an arms length, which give it a capability in the markets that are leading in the digital field e.g. retail.

I doubt this will be the last purchase in this area for Accenture this year and it is increasingly becoming the go-to 'big consultancy firm with digital expertise - if that's what you're into. Which I suspect many traditional companies with lots of legacy are.