Alliance Walmart-Google to challenge Amazon on voice shopping market

8 years ago - Published in Finance, Fundamental Analysis

Google and Walmart on Tuesday announced a partnership that would make the retailer's products available on the internet giant's online shopping mall.

The two companies said that next month Google would start offering Walmart products to people who shop on Google Express, the company’s online shopping mall. It’s the first time the world’s biggest retailer has made its products available online in the United States outside of its own website.

Consumers will be able to order Wal-Mart goods from the retailer's stores by speaking to Google's virtual assistant, which sits in phones, Google's voice-controlled speakers and soon other devices. Wal-Mart said it will share consumers' purchase history with Google to enable users to quickly reorder items, a primary function of voice-controlled orders for commodity shopping.

This is a significant change for Google Express, which before charged customers $10 per month or $95 per year for a membership. The delivery service currently provides access to a number of big-name retailers, including Target, Costco, Kohl’s, Bed Bath & Beyond, PetSmart, Staples, Toys R Us, Walgreens, and many others across a variety of verticals like apparel, home goods, hardware, health and personal care, sporting goods, and beauty.

Google believes its fees were limiting adoption and were particularly cumbersome when it came to enabling voice shopping.

The increasing importance of voice shopping suggests Wal-Mart and Google, part of Alphabet Inc., need each other to compete against Amazon. Voice-controlled ordering is a small but rapidly growing share of online sales, analysts say, and one of the top uses of Amazon's virtual assistant Alexa and its Echo speakers.

Wal-Mart also will be offering the largest number of items through the Express platform.

Walmart has a long way to go to catch Amazon. Walmart’s website sells 67 million items, up from 10 million early last year. Amazon sells hundreds of millions of items. A study last year found that 55 percent of U.S. adults start their online shopping trips on Amazon.

The battle between Wal-Mart and Amazon has recently taken on new intensity, most notably with Amazon's planned acquisition of Whole Foods, which heightens their competition in groceries. Wal-Mart this week said it is expanding grocery-delivery tests with Uber, and is testing some deliveries by store workers. Google and Wal-Mart hope to enable users to order fresh groceries via voice for in-store pickup next year.