Google and Walmart are about to put the old adage, “The enemy of my enemy is my friend” to the test.
In separate blog posts, the two companies announced on Wednesday that they will be partnering to provide Walmart products on Google Express, on online shopping mall that hopes to rival Amazon.
The collaboration is less about how online shopping happens today and more about what it might look like in the future—namely, voice activated. The idea is that Walmart customers will be ushered into a new shopping era with Google Assistant, an AI used in smartphones running Android software. When customers link their Walmart accounts to Google, the technology will someday be able to predict their buying behavior and offer them the best deals.
“We are trying to help customers shop in ways that they may never have imagined,” said Marc Lore, the brains behind Walmart’s latest efforts to increase its e-commerce offerings.
There will be many obstacles to overcome. Since Google released its shopping service in 2013, it has yet to experience any real momentum. It was unsuccessful with same-day and grocery deliveries, respectively—both services Amazon now dominates.
However, whereas many brick-and-mortar stores are struggling with what to do with their physical locations, Walmart has a new idea that might help move its sales forward: repurposing stores into e-commerce fulfillment centers. This would allow customers to pick up their orders at hundreds of stores across the country.
The effects can already be seen in Walmart’s sales: its online sales, including grocery, increased 60 percent in the second quarter of 2016.
Still, while Amazon fights with Google and Walmart, the retail market as a whole continues to suffer. Amazon’s market capitalization is at $464 billion, while Walmart’s is at $241 billion. But about 60 percent of the 97 stocks in the Retail ETF only have market capitalizations of $3 billion, giving them small-cap status. The Limited, Wet Seal, RadioShack, Payless, and Gymboree have all gone bankrupt in the last two years. Others are trading for under $10 a share.
Will this new partnership between Walmart and Google turn the tides, at least for these two behemoths? It’s unlikely they’ll ever be able to catch up with Amazon, in any case, but by their combined powers they may just be able to keep themselves afloat in an unforgiving market.
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