Inside the Walmart-Google Partnership: Getting to Know Consumers on a Whole New Level An insider's look into the most exciting new partnerships of the year
By Stephen DiFranco Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The recent alliance between Walmart and Google, between old and new commerce, is not really about voice assisted shopping lists, re-ordering ketchup on demand or having groceries ready for in-store pick up. The new partnership between Walmart, Google and now Target, is really about retailers finding a killer app to get to know consumers on a whole new level. They want to know your buying preferences as a person instead of as a buying group. They want a gateway into your home and to be part of your buying dialog, starting with "Okay Google."
Amazon on the other hand, already knows you. It has your history of online shopping. It can monitor your buying behavior over time. It knows your likes and preferences. It can predict family sizes, ages and buying needs. The engine only gets smarter the more you browse. With its recent purchase of Whole Foods, Amazon will likely create Wi-Fi enabled in-store shopping, tagging your online and in-store purchases. It will create in-store buying recommendations and determine which products should be on your subscription service because Amazon knows you. Walmart does not -- yet.
Related: Why Amazon's Acquisition of Whole Foods Is a Lesson in Committing to Employees
With 11,695 stores and clubs in 28 countries, Walmart knows how much soap, how many ears of corn and which color of bath towels are demanded by ZIP code but it doesn't know any individual's buying preferences. After years of investing in the Silicon Valley-based Walmart.com, it rarely has even half of Amazon's unique visitors (July 2017 Walmart had 83.6 million visitors to Amazon's estimated 160 million-plus) and the correlation of Walmart.com to in-store shopping is not validated at the individual shopper level. Without the years of online buying data owned by Amazon.com, Walmart knows very little about any individual person's preferences because it doesn't have individual data and its Walmart.com site has not built a large audience.
Today, Walmart can't track a family's buying habits as they change from newlyweds to empty nesters. Since it doesn't know you, it stocks based on historic point-of-sale data and demographic modeling. This drives a more limited in-store offering.
Related: 3 Eras in the Evolution of Brick-and-Mortar Retail to a Digital Future With a Happy Ending
Amazon.com's platform offers millions of products with dozens of brands in the same category. An online site based on a retail store's logistics engine, even as fine-tuned as Walmart's, will likely have limited brand choice. No amount of voice activated artificial intelligence is going to create the breadth of products offered by Amazon.com. This is why Walmart needs Google. Together they can create personalized buying catalogs.
"OK Google, what are personalized buying catalogs?" Google's analytics teams can provide Walmart a competitive opportunity by creating personalized offerings for Walmart shoppers beyond what is in its stores. Google can develop a smarter in-store experience based on Walmart customers' online interactions. Google's analytics should help determine what a Walmart store shopper should purchase in-store and what should be delivered at home.
Google should be able to leverage its calendar to recommended to buyer's the most convenient days to shop and the times when he is close to Walmart stores. Imagine SMS alerts communicating "you have two hours open on your calendar and there is a Walmart near you with no current checkout lines." When a customer enters a Walmart store and connects to the store-wide Wi-Fi network, his buying list can be pushed to his phone. When he is in the food aisles of Walmart a list of "last brands purchased" can be shown on his phone.
Related: Walmart Wants Drones in Stores Shopping for You
So, what's in it for Google? Being Walmart's "killer app" will be a big win for Google and its Android partners. Walmart customers are loyal to the brand. If Walmart shoppers know there is a tight connection to their favorite store, they will choose Google Home over Alexa and may opt to use Google Voice on their phones instead of Apple's Siri. This may lead to Walmart families choosing other Android-based phones, tablets and future OTT products based on Android -- a win for Google Search and Android phones. This partnership can also provide Google access to a broader demographic segment of homeowners as the market for home information and entertainment changes. The "Walmart Home" may be the path to Google winning in home media and other home connected devices.
After creating the world's greatest retailer, one of the most sophisticated logistics systems and becoming the largest buyer of nearly every brand in its store, the missing piece that Walmart needs now to compete with Amazon is Google Home announcing, "Welcome, Walmart shoppers!"
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