Wal-Mart (NYSE: WMT) is focused like a laser on challenging Amazon.com (NASDAQ: AMZN). From pricing to delivery, the retail king wants to counter the e-commerce leader at every turn.
The latest salvo in their bruising retail war? Wal-Mart is tag-teaming with Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) to let customers shop online for more than 2 million products on Wal-Mart's website using Google Home and Google Home Mini voice assistants. It's a smart pairing of two of Amazon's biggest rivals that challenges the latter's Alexa technology on its own turf.
Continue Reading Below
Letting the fox into the henhouse
Some retailers seem to have bought into the idea of keeping your friends close and your enemies closer. Kohl's (NYSE: KSS) agreed to serve as a drop-off point for Amazon returns, and it has even invited Amazon into its stores to sell products like the Echo and Echo Dot, devices that consumers will eventually be able to use to bypass shopping at Kohl's altogether.
Malls are also installing Amazon Lockers to allow shoppers to pick up merchandise they purchased online, a controversial effort as mall tenants fight for survival against the e-commerce threat.
These traditional retailers are operating on the mistaken belief that by working with Amazon, they can increase store traffic and possibly boost their own results. However, the experience of Staples and Radio Shack, which also installed Lockers in their stores only to quickly abandon them, suggests the outcome will be far less beneficial.
Wal-Mart, on the other hand, has chosen not to embrace Amazon but to ally with its own rivals.
Doing one better
Wal-Mart isn't the first retailer to deploy Google hardware to help customers shop by voice. Costco, Target, and Ulta Beauty are just some of the major chains that have also leveraged Google's suite of smart-home products to boost sales. Earlier this year, even Whole Foods had partnered with Google.
What sets Wal-Mart's efforts apart is that it allows users to integrate their pre-existing Wal-Mart account with the Google Express service while also offering the largest selection of products to choose from.
That means the voice assistant will be able to scan the customer's past purchase history and suggest a product it knows a customer has already purchased, for example, rather than go through an unwieldy back-and-forth process of narrowing down the product.
Fight for the last mile -- and inch
New York City has been another recent battleground between the two companies. Wal-Mart's acquisition of delivery start-up Parcel -- a last-mile shipping service that offers same-day, overnight, and scheduled deliveries in the city -- allows the company to experiment with faster and more complex deliveries.
The partnership with Google is just another piece of its ongoing strategy to avoid being left behind as Amazon gobbles up online market share.
For its part, Google is seeking to challenge Amazon as well, deploying its Google Home devices with as many retailers as possible, and making its biggest selling point its agnostic view of where people spend their money.
It will be a challenge for both sides of the partnership. Amazon is the single place people are most likely to turn to first when they're shopping online. Last year, a survey by BloomReach found 55% of consumers start their online shopping at Amazon, and earlier this year, research firm eMarketer found Amazon Echo and Echo Dot devices will control more than 70% of the voice-assistant market this year, compared to less than 24% for Google Home.
The parties involved seem to understand the long-term nature of their rivalries. By joining forces, Wal-Mart and Google are in a stronger position to make serious inroads on Amazon's turf.
10 stocks we like better than Wal-Mart StoresWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Wal-Mart Stores wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool recommends Costco Wholesale and Ulta Beauty. The Motley Fool has a disclosure policy.