After Amazon’s acquisition of Whole Foods Market, and Alibaba’s assault on physical retail through Tmall, it is Google-Walmart’s turn. Meanwhile, Amazon is continuing the race in synergy with Microsoft.
The new alliance between the American web and retail giants stems from an awareness of the current weaknesses of each:
– Google is losing traffic, and more importantly, control of the end consumer. As these increasingly turn directly to Amazon for research and purchase. Without the prior passage to Google Search, as was done in the old days,
– Walmart lacks technology, which it is forced to draw from third parties. After the failure of its internal development, on both fronts of ecommerce (see Jet.com) and functional technologies for carrying out its activities (ERP, web services, etc.).
Walmart moves to the rear, as it has always done in recent years. It recoils from the technological innovations developed by competitors, and today-despite being number one in physical retail-is in obvious difficulty. As it depends on outside vendors on the main battlefield, technology. Instead, Google is playing offense, to reassert its leadership in a transition phase.
Meanwhile, Amazon is teaming up with Microsoft to implement the voice assistant (Alexa and Cortana). Amazon is interested in business customers, Microsoft in individuals and smart homes, i.e., the evolution of home automation.
Investments in virtual assistants and the alliance between Amazon and Microsoft are of great concern to the Mountain View giant (Google, ed.). Since the consumer who does voice searches in comfort, at home especially, may well do without the search engine. (1)
On the strategic level, Amazon therefore needs some big allies to invade so many markets, stepping on the toes of their big players. And Microsoft is a master of long-term strategy, as history shows. Being the only company, in the 2007 Global Top Ten , to have accumulated value in the following years to date. (2)
Fabio Ravera and Dario Dongo
Notes
(1) However, an antitrust reaction will be expected, at least at the European level
(2) The other giants of the time have disappeared or lost. General Electric, for example, collapsed
Specialist in distribution models and Revenue Operations with over 25 years of projects in different industrial sectors and countries (12 years in the US). I work on Lean Organizations, Supply Chain Inefficiencies, Organizational and Financial Restructuring Projects, Digitization and GDPR
