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From: Paul H. Christiansen8/23/2017 7:37:27 AM
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Wal-Mart and Google Partner to Challenge Amazon



Google and Wal-Mart Stores Inc. are joining forces in a partnership that includes enabling voice-ordered purchases from the retail giant on Google’s virtual assistant, challenging rival Amazon.com Inc.’s grip on the next wave of e-commerce.

Wal-Mart said Wednesday that next month it will join Google’s online-shopping marketplace, Google Express. While the deal will add hundreds of thousands of Wal-Mart items to Google Express, it will also give Wal-Mart access to voice ordering. The deal won’t alter how consumers receive their orders, because Wal-Mart will fulfill purchases made through Google Express.

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.

“How do you help people who are going to be interacting more and more with devices get their weekly shopping tasks taken care of?” Google Express chief Brian Elliott said in an interview, citing a key reason for the partnership.

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 reasons to use Amazon’s virtual assistant Alexa and its Echo speakers.

Amazon effectively invented voice shopping, which allows users to easily order goods, like toilet paper and diapers, thanks to Amazon’s vast data set on customers’ past purchases. A significant portion of online shopping is made up of consumers reordering the same staples. That is well-adapted to voice ordering because a device can recall the preferred brand, size and type, without requiring shoppers to scan through different product listings.

“When I buy a product that I don’t care about, it is actually a pain for me to go to a website and find an item and check out,” said Forrester analyst Brendan Witcher, a former retail executive. “If I can simply say, send me dishwashing soap…and you send it, that’s much easier on me as a consumer.”

To make voice shopping easier, Wal-Mart said it will allow users to link their Wal-Mart accounts to Google Express, so a Wal-Mart shopper who asks the Google Home for more toothpaste will get the same brand she bought last time.

The Wal-Mart-Google partnership comes as Amazon continues to expand its share of online purchases. In July, Amazon claimed nearly 45 cents out of every dollar spent online, according to receipt tracker Slice Intelligence, up from about 43 cents at the start of the year. Wal-Mart, in comparison, claimed nearly 2 cents of each dollar, holding steady.

Google launched Google Express in 2013 and steadily expanded the service to reach the full contiguous U.S. by late last year. Google enlists third-party firms to fulfill orders from a variety of retailers, including Target Corp. , Costco Wholesale Corp. , Walgreens Boots Alliance Inc., and Whole Foods Market Inc., which Amazon agreed to buy in June for $13.7 billion. Google Express earns money on commissions from those merchants. Wal-Mart said it would fulfill its Google Express orders itself, a new, likely cheaper model for Google.

Google said on Wednesday that it is also dropping the $95 annual fee for free shipping on orders that reach a given store’s minimum cart size, similar to a move Wal-Mart made in January. Google Express’ Mr. Elliott said the company decided to offer free shipping on such orders, with a typical minimum of $25 or $35, to make buying easier, particularly when ordering goods via voice interactions.

Wal-Mart will leverage Google’s virtual assistant and Echo competitor, the Google Home, to make its goods available at the sound of a consumer’s voice. Google, meanwhile, hopes access to Wal-Mart’s inventory will help boost engagement and sales of its assistant and speakers. The partnership will enhance the selection and overall cachet of Google Express, which competes with delivery services such as Instacart Inc. and Uber Technologies Inc.

Amazon introduced the Echo in 2014, a first-of-its-kind voice-controlled smart speaker, and sales quickly took off. Google debuted its Home speaker late last year, and now has about 26% of the market as of June 30, according to Consumer Intelligence Research Partners LLC. The Echo has the rest. Apple Inc. plans to start selling its smart speaker in December.

More than half of Echo users have bought something on their device, and about 30% of those customers buy something at least once a week, according to Consumer Intelligence Research Partners’ survey of 300 device users. Google Home owners do so at a much lower rate, the survey says.

In recent weeks, Jonathan Khoo, 40 years old, has ordered frequently from his Echo, including Mr. Clean Magic Erasers, Balance Bars, Krazy Glue and BIC lighters. Most of those are inexpensive items that a shopper would usually need to bundle with other purchases to reach a delivery threshold. But they ship as single items via voice, a perk Mr. Khoo, a software developer, says has convinced him to order more from his Echo.

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.

Wal-Mart is competing more aggressively online since its $3.3 billion purchase of shopping site Jet.com last year, headed by Mr. Lore, who then took over Wal-Mart’s e-commerce business. Mr. Lore was formerly at Amazon after the online giant bought his e-commerce site in 2010. Amazon recently shut down the unit, Quidsi, citing its unprofitability.

https://www.wsj.com/articles/wal-mart-and-google-partner-to-challenge-amazon-1503460861?mod=djemalertTECH
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