Skip to content

Seeking mutual benefits, Google & Walmart partner up

2 days ago Google & Walmart announced their partnership in what is widely seen as a counterweight to the eCommerce juggernaut – Amazon


It’s all about Mutual Benefits

Quick summary

Google brings to table it’s platform – namely Google Home (voice assistant) & Google Express (delivery) <–> Walmart makes available it’s extensive catalogue on the platform (products)

The next big battlefront to win over consumers is well underway – provisioning of ‘Frictionless Shopping’ experience

For Walmart

#1. Instant AI

By any measure, it would have taken Walmart considerable amount of investment (money & time) to develop it’s own voice AI platform; which would have entered an already crowded market… in turn leading to low adoption (learning from it’s m-Payment escapade)

Partnering with Google instantly unlocks the ‘Voice AI’ component of frictionless shopping for Walmart…. Today!

#2. Increased customer touch-points

Bolstering it’s existing e-presence (including jet.com) with a large brick-n-mortar footprint and now Google’s virtual (voice) world, Walmart has effectively increased it’s customer touch-points against Amazon (who is aiming for the same goal with it’s own brick-n-mortar initiatives)

Walmart is expecting it’s existing base & new customers alike can interact with the brand anytime – anywhere – anyhowIn-store, Online & now via Voice

For Google

#1. Retail initiative v2.0

Google Express could perhaps find new life by on-boarding one of the largest retailers (Walmart) who brings along with it million+ weekly shoppers, extensive SKU range & shared desire to compete with Amazon

#2. Data, Data & more Data

There is no doubt that Google is already salivating at the prospect of receiving (literally) mountains of data from the million+ weekly (Walmart) shoppersboth offline & online… which when shared with Walmart, levels the playing field against Amazon

This vast shopper behavior data sets could perpetually strengthen Google Home’s underlying AI algorithms, enabling it to better compete (shopping-wise) against current #1Amazon Echo (Alexa)

Needless to say this vast shopper behavior datasets will allow Walmart & Google to further ‘individualize’ up-sells, cross-sells & vendor advertising (translated = $$$) across their combined platforms


But will it shake Amazon?

The overall impact to Amazon from the Google-Walmart partnership is expected to be minimal (if at all) for a few reasons

#1. Existing Loyal customer base

Amazon’s Prime renewal rates (read: retention / loyalty) are typically north of 92% as members seem to be attracted to it’s ever growing range of ‘lifestyle offerings’ going beyond just shopping

Though it is conceivable that a percentage of this base also shop at Walmart (across all channels), it is highly unlikely they would completely detach themselves from Amazon

#2. Instant (affluent) offline advantage (Whole Foods factor)

Starting Monday, Amazon instantly get access to Whole Foods’ 450+ physical stores (still a fraction of Walmart’s 4,100+ stores) allowing them to further bolster their omni-presence initiative whilst disrupting the uber lucrative grocery category

Amazon may not need 4100+ physical touch-points at all, especially since it has gained 450+ refrigerated (fresh food) touch-points within miles of the some of the most affluent neighborhoods across America in addition to an extensive network of distribution centers

Whilst no one is expecting to find a generic branded drone in aisle 18 of their neighborhood Whole Foods, they may soon have the ability to order one online & pick one up at the store – in perhaps under 2 hours!

#3. Frictionless Service Leader

Today, Amazon isn’t a just a retailer… it is a (technology-first) Frictionless Service provider

As long as Amazon keeps ahead of it’s competition in developing innovative consumer-centric technologies (Amazon Go, 365 innovations, etc.), the combination of Walmart & Google won’t be a threat… just the same way as Amazon Search (if it ever existed) won’t be a threat to Google Search for quite some time to come


So who is really impacted?

Small-Mid tier & other multi-speciality Retailers / Grocers

Perhaps, any adverse impact from the Google-Walmart partnership (& ensuing retail wars between the 3 titans) would most likely be felt by the hundreds & thousands of small-mid tier retailers peppered across America… as well as handful of National multi-speciality ones as well (think: Target, Safeway)


So…

There is no doubt that creating a frictionless consumer shopping experience is the next big win for all retailers, but it’s broader impacts on all players (large & small) is yet to be explored in more detail