Tuesday, April 2, 2019

How does Walmart compete with Amazon? (II)

Earlier we blogged that Walmart was acquiring firms that would speed development of:
1. an "artificial intelligence system that could someday power an automated personal-shopping service;" and 
2. autonomous cargo vans for home grocery delivery.

Now we learn that Walmart announced the first fruits of their partnership with Google:

Beginning this month, customers can say, 'Hey Google, talk to Walmart' and the Google Assistant will add items directly to their Walmart Grocery cart. Best of all, customers can be extra confident that we can quickly and accurately identify the items they are asking for with the help of information from their prior purchases with us. The more you use it, the better we’ll get.

This seems like a good example of Hal Varian's thesis (Hal is chief economist at Google) that the Tech Giants are being drawn into competition with one another:

Consider today’s leading tech companies: Google, Amazon, Facebook, Microsoft and Apple. They are not stuck in silos or hemmed in by a single business model. Instead, they compete intensely among themselves. For consumers this boils down to tangible benefits: products and services are better, faster and cheaper than ever before. 
...Entering a new market in the online world is far easier than in the offline world, since the necessary assets — hardware, software, and motivated employees — are readily available. But if companies can switch to new products quickly, so can their customers. You do not even have to walk across the street to switch between Lyft and Uber, or Google and Bing. Competition is a click away, so competitive advantage can erode quickly.

In this case, Google's search expertise allows Walmart to better compete with Amazon's in online retail and distribution.

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