Adroit Market Research - Industry Insights

Walmart has shaped a competent e-commerce business by spending billions to data scientists and hire engineers, developing automated distribution centers made for web orders and even started curbside pickup for online grocery orders at 2,000 plus stores. To compete with the continuously thriving company like Amazon, Walmart and Google announced that Google would begin offering Walmart products to users or customers who purchase on Google Express, the company’s online shopping mall. In the whole history of online shopping, this is the first time the world’s biggest retailer has come forward and made its products available online in the United States outside of its own website.

Walmart has shaped a competent e-commerce business by spending billions to data scientists and hire engineers, developing automated distribution centers made for web orders and even started curbside pickup for online grocery orders at 2,000 plus stores. The retailer created $11.5 billion in online sales during the last year in the U.S., and has revamped and redesigned its website that is capable to showcase apparel and home décor in more presentative way and was anticipated to surge that total by 40 percent in 2018.

However, Walmart already acknowledge that sustaining a battlefield all alone is no longer possible when e-commerce giants like Amazon has come up with some extraordinary technology. At present, Amazon.com captures 49 percent of the U.S. e-commerce market, according to a research industry, up from 43.5 percent past year. Amazon already leads entertainment and toys and is now pushing its boundaries in the areas that are dear to Walmart. Last year, it acquired upscale grocer Whole Foods Market which has menaced a business that makes up more than 50 percent of Walmart's U.S. sales.

To compete with the continuously thriving company like Amazon, Walmart and Google announced that Google would begin offering Walmart products to users or customers who purchase on Google Express, the company’s online shopping mall. In the whole history of online shopping, this is the first time the world’s biggest retailer has come forward and made its products available online in the United States outside of its own website.

The partnership is a testament to the mutual risk facing both the companies from Amazon.com. Amazon’s is known to have a remarkable dominance in online shopping which challenges brick-and-mortar retailers like Walmart. As more number of customers have started web searches for products they might purchase on Amazon instead of Google.

But putting efforts together doesn’t ensure that they will acquire the world of online shopping. As for most consumers, Amazon is the primary option when buying a product online as their inventory size is unmatchable and its towering efficiency to move shoppers from browsing to buying along with great home delivery options is incomparable.

The two companies stated that the partnership made is lesser about how online shopping is done currently, whereas it’s about where it is moving ahead with the future. They assert that they foresaw Walmart customers ordering the items or products is recurring as they shopped in the past by speaking or instructing to Google Home, the company’s voice-controlled speaker and aggressive reply to Amazon’s Echo. The final plan is for Walmart customers to also shop by taking assistance of Google Assistant which is, an artificially intelligent software assistant majorly in today’s smartphones and running Google’s Android software.

Walmart customers are able to link their accounts to Google, letting the technology giant to absorb or assimilate their past shopping behavior to predict with more efficiency about what they want in the forthcoming future. With the surveys done, Google has found that because higher than 20 percent of searches are conducted on smartphones with help of voice only which anticipates that voice-based shopping is not far behind in the race and will boost in the near future.

“We are trying to help customers shop in ways that they may have never imagined,” said Marc Lore, who is leading Walmart’s efforts to reinforce its e-commerce business. Google is considered snail in e-commerce. Since commencing a shopping service in 2013, it has struggled hard to gather substantial momentum. At the beginning, it was offering free same-day delivery before scrapping it. It has even also attempted delivery of groceries before abandoning that, too.

When compared Amazon and google, an official said, “If Amazon is a department store with just about everything inside, then Google Express is a shopping mall populated by different retailers. There ample retailers which counts 50 on Google Express, including Costco and Target. Inside Google Express, a search for “toothpaste” will bring back options from about a dozen diverse retailers.”

Google said it has strategized to provide free delivery — as long as shoppers satisfy store purchase minimums — on products bought on Google Express. Google had priced customers a $95 a year membership for free delivery. Amazon runs alike program called Amazon Prime which offer free delivery for members who pay $99 a year.

The partnership with Google exhibits one of numerous steps that Walmart has taken over the last year to consolidate its online business.

Walmart started providing free, two-day shipping on two million plus items — a move that gives competition to Amazon Prime, whose members who pay yearly fees for various services like movie streaming and fast shipping. Walmart has also been striving to integrate its digital business with its vast network of more than 4,690 stores. Many brick-and-mortar retailers are battling with what to do with their growing empty stores, but Walmart is partly repurposing its stores into e-commerce fulfillment centers.

Customers can now order their groceries online and then pick them up at hundreds of stores. For some items that they purchase online and pick up in a store, customers receive a discount. In-store pickup reduces shipping costs for Walmart, but offers a similar level of convenience to the shopper as home delivery.

Walmart informedsaid that its online sales — including online grocery has surged 60 percent in the second quarter from last year. It was a big driver in the company’s overall increase in quarterly sales. Online grocery is observed to give greater push or traction, but Walmart expects the benefits of other moves — like acquisition of Jet.com with its $3.3 billion, an online retailer focused on urban millennials, and its purchase of the boutique clothing businesses Modcloth and Bonobos — will come down the road.

Some analysts question how Walmart will add to its core low-price retail business at the same time it is trying to manage bolt-on acquisitions. While the company’s sales were up, its profit margins in the second quarter slipped, in part because of its spending on e-commerce initiatives. With this new partnership, Google Express will offer items only from Walmart.com, and not from Jet.com or Walmart’s online clothing sites.

Walmart is no longer behind Amazon. Walmart’s website is able to sell 67 million items, which was just 10 million past year. According to stats, about 83.6 million audience hit Walmart’s website, nearly 50 percent as many visitors as Amazon had. Jet drew an additional 10.9 million visitors.

“I am not saying Walmart is ever going to catch Amazon online,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. “But instead of being embarrassed by Amazon, it can be a strong No. 2.”