When the legacy retail giant and current internet king shake hands, Amazon.com has to stop and take note because it knows: no one dominates the market for long in the digital world without learning how to adapt and adjust with viable digitally transpired developments. Agile Supply Chain; thus, is crucial to keep the business alive.
Google, the American king of next-gen internet search engines and digital applications, recently partnered with the legacy retail king, Walmart, to put forth an online retail marketplace that can keep the topical next-gen retail king, Amazon.com, honest. If the goal is at all realistic, Google would be the only one able to find out. It is, after all, the owner of the most useful and popular Office Application on majority smartphones in the world which means people are already interacting with the App on a regular basis. Thus, a battle between two strongholds: online retail vs. smartphone application. A benefitial contest that makes things even better for the average customer and business operator, to say the least.
The Google-Walmart marketplace is set to go live as early as next month. Walmart customers will be able to access Walmart’s shelves through an On-line Retailing Service ran by Google Express, a Google marketplace with enabled voice purchases via Google Home or Voice-activated Speaker where the intelligent voice system controls internal home devices and a challenge to Amazon Echo’s Alexa. To no surprise, the development is causing a shift in supply chain management for retail businesses to make adjustments and ultimately transform to a Smart Consumer Supply Chain where supply chain flexibility becomes a core competency. This should present a major challenge to retail operators and businesses of tangible products to embrace change to accommodate unprecedented digital capacities of analyzing and forecasting customer demands from a shelf-centric data-driven perspective.
To oil the physical wheels of retailing, while Google announced to forego the $95 per year Express Shipping membership fee and provide free shipping for orders that meet volume requirement, Walmart has promised to set up a Fulfillment Network with over 4,700 centers across the US that will create a great shopping experience for the customers, it be via voice purchase accomodation or delivery proficiency helmed by the new automated distribution network. The disposition adds value, also, as Walmart customer accounts are linked to Google’s and automatically enjoy new on-line and in-store promotions, optimized by streamlining digital and physical operations. For example, shoe shopping experiences with Walmart will be enhanced as Google fetches and analyzes existing information saved from the initial transaction so the customer doesn’t have to redundantly enter the same data over and over again and aid the process of identifying new similar products as well as potential ones along with best promotions and shipping savings available. Although Walmart and Amazon have been in competition for quite some time, it is predicted that Walmart will be able to strengthen an e-commerce stronghold and gain market share. Meanwhile, Amazon is poised to take a cut from Walmart’s downmarket no-frills stake, as well.
Amazon’s online market share has been growing beyond the average retailer, including Walmart, on a yearly basis with Alexa-powered Echo taking a 70% share of the market in the same category at the closing of 2016. Wall Street Journal (WSJ) reported that the key factor to online retail success is repeat purchases where customers continually reorder the same products, predominately. Voice Ordering for that matter becomes an convenient channel for recalling preferred brands to repeat the same purchase again without being presented with alternative or similar options to consider.
Making available a vast array of Walmart products through Google Express is indeed an exciting development for Google. For Walmart, on the other hand, is a necessary move that must be made to remain relevent and compete with giant competitors such may Target and Costco that are already on the Google Express train.
Such a battle represents changes in 3 different areas:
1.Voice ordering: While over-the-air commands have been around for some time, e.g., 20% of Google searches are voice queries through mobile devices according to Gartner, the important mechanism is are the Machine Learning Natural-Language Question Answering and Virtual Personal Assistants (VPAs) running in the background. VPAs are being intensely researched and developed by interested companies such as Google, Amazon, Microsoft, Apple, Baidu and even Facebook, which is expecting a VPAs capacity that can recognize individual customer behavior. As a result of this partnership with Google serving as entry channel for customers and Walmart taking care of Fulfillment Center duty it is no surprise that Voice-based Shopping technology will be progressively developed through the evolving future.
2. The fierce competition for e-commerce innovations: When Amazon acquired the luxury food business (from a previous article >> Amazon and the new business “High-end Grocery”), it was conceivable that the retail giant would rule a monopoloy in yet another market. Today we have found, instead, that the industry remains very much competitive, not only with Walmart product purchases through Jet.com but also through transportation consolidation. Although major players like Instacart, UberRUSH or Postmates offer e-commerce platforms to retailers, they do not include fulfillment services. Nordstrom, Burberry and Nike all manages through an internal Omnichannel strategy while also catering customer experiences through actual in-store contact. Point being, no one truly dominates the market for long.
3. Pressure on Supply Chain segments: e-commerce not serves as a retail channel but also facilitates variety-creative packaging designs that caters good customer experience. Thus, competitors will be forced to undergo major adjustments as the focus up to recently has been predominately on Mass-Market Supply Chain stratagems or the replenishment of products on the shelf.
This partnership sends a positive signal that it is not too late for competitors to start making adjustments to optimize internal operations that meet the needs of customers, accroding to industry standards. Such adjustment will make supply chain more flexible and more relevant to end-users. While Voice Ordering optimizes repeat purchases of consumer goods such as toilet paper, detergent, and etc., it also collects data that can be used to analyze customer behavior and plan marketing.
Thus, the only way businesses can continue to operate today is by adapting to viable digital developments that is taking shape and unfolding in the close foreseeable future as well as learning to take advantage of huge amounts of information made available through big data digital systems, and last but not least, not overlooking process flexibility. This is the biggining of an era of a marketplace with never ending competition. Particularly, all supply chain activities must be able to adapt to situations as it happens without disrupting business operations. This factor, alone, presents a major challenge for every department.
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Reference and photo forbes.com, npr.org, corporate.walmart.com, thewirecutter.com, pexels.com, amazon.com