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Even in the war over retail, necessity is the mother of cooperation

Even in the war over retail, necessity is the mother of cooperation

Amazon has become the Standard Oil of the 21st century in its willingness to lose money by lowering prices far below its competition in order to bankrupt them, or force them to follow suit.  And while it is very true that overhead and margins are much cheaper for online business portals, most retailers still have too much invested in high cost brick and mortar stores to be able to compete head to head with Amazon’s business model for any real length of time.

So when a force majuere comes onto the scene like it has with the world’s second largest online store, businesses must either adapt or innovate, or they will find themselves in the graveyards of yesterday’s greatness.

Yes, like you General Motors, Sears, and J.C. Penny.

With this in mind Wal-Mart, who rose to power by creating a supply chain model that blew away nearly every retailer functioning in the U.S., are themselves at a crossroads on how to compete head to head with Amazon.  And it appears their solution is in partnering up with the world’s biggest search engine to try to create an online portal that dwarfs that of the Bezos upstart.

WAL-MART, the world’s biggest retailer, and Google, the Internet’s predominant search engine, are teaming up in an attempt to challenge Amazon’s growing dominance in online shopping.

The deal will make the retailer’s products available on Google Express, and follows Amazon’s announcement that it plans to acquire supermarket chain Whole Foods.

“Starting in late September, we’ll be working with Google to offer hundreds of thousands of items for voice shopping via Google Assistant — the largest number of items currently offered by a retailer through the platform,” Marc Lore, Wal-Mart’s head of e-commerce, said in a blog post late Tuesday.

Wal-Mart will integrate Google Express, which already lets people purchase products from a large range of brands, such as Costco and the pharmacy Walgreen’s, into its own platform.

“If you’re an existing Wal-Mart customer, you can choose to link your Wal-Mart account to Google and receive personalized shopping results based on your online and in-store Walmart purchases,” Google said in a statement. – Shanghai Daily

Only a chain as big as Wal-mart could have the resources to try to take on Amazon, and to try and dominate both the brick and mortar as well as the online retail space.  But even they realize that they needed assistance and this is where the power of Google comes into play.

It will probably be less than a decade before 80% of all product purchases are done completely online, and brick and mortar businesses will summarily be dedicated towards experiences over product sales.  But that is often the way of technological advancements, and the history books are chock full of industries like the horse and buggy who now only exist as memories, or in a museum.

Kenneth Schortgen Jr is a writer for The Daily Economist, Secretsofthefed.com, Roguemoney.net, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.


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