Walmart plugs into Google to compete with Amazon Alexa shopping
Walmart customers will soon be able to shop for groceries online using Google hardware, giving the retailer an established market for voice ordering — that is still a distant second to Amazon's Alexa user base.
The challenge Walmart faces in partnering with Google is that Google has such a small position in the smart speaker market. According to Consumer Intelligence Research Partners (CIRP) Amazon continues to have a commanding lead in the U.S. installed base of smart speakers despite the entry by Apple in February 2018. Amazon controls a 70% share of the 66 million smart speakers while Google has found it difficult to break beyond a 24% to 25% position for much of 2018.
"Consumers have taken favorably to Amazon’s Alexa for shopping by voice," said Raymond Pucci, director of merchant services for Mercator Advisory Group. "Walmart has been flexing its tech capabilities, especially in e-commerce channels … So this is a significant conversational commerce play by Walmart to make its presence felt."
Pricing of smart speakers may be a factor in Amazon’s commanding lead. Google Home Mini, at $39, is on par with Amazon's $40 Echo Dot — but with little to differentiate the devices, consumers won't feel motivated to swap out Amazon's hardware.
Walmart Voice Order works on Google voice assistant-enabled devices such as Google Home and Android smartphones. Activating the feature is an extra step — users must say "Hey Google, talk to Walmart" before they can build a shopping list — but without any significant rivals on Google's smart speaker, consumers may be willing to jump through that hoop to shop by voice.
Since most consumers build their grocery lists at home, smart speakers are likely to be the main point of entry for building a shopping list. Building on the trend where consumers are rapidly adopting online grocery shopping and delivery or curbside pickup, Walmart is keen to be at the forefront – or at least not left behind.
By introducing voice enabled grocery shopping, Walmart will be able to better protect its market share position in the $800 billion grocery market, which is estimated to be at a 21.5% share, according to a report from CNBC.
“It’s cross-platform, which means customers can use any device utilizing Google Assistant, and allows for items to go directly to a customer’s shopping cart, making this capability one of a kind. We’re kicking off the work with Google, adding others to the mix as time goes on," stated Tom Ward, senior vice president, digital operations at Walmart in the blog post.
The move is part of an increasingly bruising battle between traditional brick-and-mortar retailer Walmart and e-commerce powerhouse Amazon. Walmart has made great strides to morph into an omnichannel retailer with acquisitions such as Jet.com as well as doubling its grocery delivery footprint.
"It’s not surprising that Walmart’s grocery stores will be the prime beneficiary," Pucci said. "Grocery has become a hotly contested vertical as there are many players looking to grab market share from each other. Price cutting, technology investments, and online ordering are the current strategies."
Despite these moves, Walmart has struggled in the grocery delivery business with crowdsourced delivery startup app Deliv quitting a Walmart pilot in February due to its drivers having to wait too long at its stores for their packages. Walmart also ended grocery delivery pilots with Uber and Lyft last year over dissatisfaction of how the pilots performed.