*This article was written by Angelica Valentine, Marketing Manager at Wiser.
By now you’ve heard the news that Walmart and Google have teamed up to provide Walmart products through Google Express, Google Home, and Google Assistant.
If that sounds like a random match up, let’s take a look at the timing.
FREE GUIDE: The Google Shopping Guide 2017
Amazon just got the green light to proceed with its takeover of Whole Foods and its Alexa-powered devices dominate the virtual assistant market, with Echo commanding over 70% of the market.
But one of the main problems with shopping through a voice-activated virtual assistant is that product specifics don’t go over so well.
“Buy some milk,” can even be a difficult command. Do you want organic, 1%, whole milk, almond milk?
Currently conversational commerce, as it’s been dubbed, is mainly useful for routine purchases. Because there’s a slim number of things you can buy that are straight shot purchases (no size, color, style etc. involved).
Order history comes in here to save the day. If Google or Amazon don’t know what brand of toilet paper you want, you’d be better off making the selection yourself.
But data can fix this and Walmart is already one step ahead with their Easy Reorder feature that will be core to this partnership.
Google and Walmart are a match made in heaven, because Google Shopping wants the purchase history data and Walmart wants the nearly immediate shipping capabilities.
Can you see the ad targeting potential this lays out for Google on a red carpet? If you’ve ever said “I want Google to know even more about me!” Well, it’s your lucky day.
This new partnership could have greater potential than Amazon’s Alexa because, while Google Home adoption pales in comparison to the Echo, it has the added bonus of already being built into Android phones.
And when your Alexa-powered device sits at home while you’re out and about, your phone, packed with shopping potential, is on your person around the clock.
Why the Timing of This Partnership Matters
Amazon’s foray into groceries haven’t been as widespread, although their Whole Foods takeover will certainly change that.
Is this Walmart-Google partnership a preemptive move in anticipation of Amazon’s tightening grasp on the higher-end grocery market?
Even if it is, the fact of the matter is that Walmart is the king of the US grocery market, with the largest share by a mile, sitting comfortably at 14.5% market share. In comparison, Whole Foods has a paltry 1.2%, and Amazon is just a blip on the radar with 0.2% of sales.
This also fits with Walmart’s recent flurry of acquisitions to shore-up the eCommerce side of their business.
With Jet.com founder as the new head of Walmart’s eCommerce division, it’s clear that strategic partnerships that position Walmart for future success will continue hitting the market.
Marc Lore’s influence on Walmart has been apparent although he’s only been there a short time.
For example, he lowered Walmart’s free shipping threshold to $35 — on par with Jet.com’s policy. Now this will spill over into Google because no one likes paying membership fees.
Bypassing the $99 annual Prime fee, the $95 Google Express fee, and simply getting free 1-2 day shipping on items over the same $35 threshold, gives Google Express a distinct advantage.
Future of Conversational Commerce
While conversational commerce seems like a niche market, mobile commerce used to be as well. According a study by Walker Sands, only 15% of shoppers say they make purchases using voice often, but this will slowly tick upward.
In the same range, 19% of shoppers reported that they used Amazon Echo or a similar conversational commerce device to make a purchase since last year.
However, the fact that this figure jumps up to one third for shoppers who plan to make a voice activated purchase in the next year gives hope for this Google and Walmart endeavor.
SapientRazorfish suggests purchases made by voice account for about $250 million of the retail market each year, but with an online market that recently hit $390 billion, it’s got a lot of room to grow.
Especially with a retail player as strong as Walmart, which pulled in $485.9 billion last year, there’s no way for this to go but up.