Walmart (NYSE: WMT) and Alphabet (NASDAQ: GOOG) have opened a major new front against Amazon (NASDAQ: AMZN) in the online retail wars.
Walmart products will soon be available through Alphabet’s (NASDAQ: GOOGL) online delivery solution Google Express, The New York Times reported. That means customers will be able to order stuff through Google Shopping. It also means the merchandise they order will be delivered by Google’s branded vehicles.
This also means that customers will be able to order Walmart items via voice through Google Assistant and Google Home; Alphabet’s answer to Amazon Echo, The Times reported. Walmart’s easy reorder feature will be integrated into Google Assistant to make it even easier to spend your money at Walmart.
Customers will be also be able to pick-up Walmart merchandise ordered through Google Express, Google Home and Google Assistant at Walmart stores, a press release indicates. Presumably they will also be able to access the various Walmart delivery services through the same mediums.
A major rationale for this deal is to give Google Express access to Walmart’s logistics, inventory and distribution resources. An interesting problem for Alphabet is that other retailers might simply lack the resources to supply its’ customers – Walmart certainly has those capabilities.
A perhaps greater motivation is to give Google Express customers access to the Walmart Price. One reason why Alphabet’s solution may not have caught on is that its prices are simply too high. Walmart can certainly fix that problem quickly.
Will Walmart and Google Express Threaten Amazon?
It is not clear if merchandise from Sam’s Club and Jet.com; which Walmart owns, will be available through Google Express. Nor is it clear if other merchandise ordered through Google Express can be picked up at Walmart stores.
One big advantage to this service is that it would allow customers to pay for Google Express orders with paper cash at Walmart stores. That would open up online orders to many new customers. The San Francisco Federal Reserve estimated that around 32% of purchases in the US in 2015 were made with cash.
Another advantage is to reach customers that would normally not shop at Walmart. There are many Americans that refuse to go to Walmart because of snobbery or personnel dislike those people might be willing to order from Walmart via another service such as Google Express.
What is the Future of Google Express?
Nor is it clear if items ordered from other customers via Google Express will be shipped through Walmart’s delivery network. Walmart operates branded delivery trucks in some markets like Denver and offers delivery via Lyft and Uber. The discount giant is also experimenting with deliveries made by its employees in their own vehicles.
Another potential problem is all the other retailers that participate in Google Express. Many major Walmart competitors including Costco, Walgreens, PetSmart and Kohl’s are participating in Google Express. One Walmart subsidiary Moosejaw also participates in the service. Interestingly enough, Whole Foods (NASDAQ: WFM) which has been sold to Amazon is also participating in Google Express.
One has to wonder what the future of Google Express might be. A possible outcome is that Walmart intends to buy it. That would make a lot of sense but it also means that most of the other retailers would have to leave that platform.
Though one development is obvious here, the online retail wars are about to get far nastier and far more bloody. There’s a major new alliance between two giants that will make life a lot harder for Amazon. It is also obvious that the retail apocalypse is about to get far worse, particularly for low end discounters; such as Dollar General (NYSE: DG), and for Target (NYSE: TGT).