Amazon seems to be stepping on a lot of toes in the food industry with their acquisition of Whole Foods last summer and their AmazonFresh e-commerce grocery delivery service. However, major retailers are not going to take this pressure laying down, which is why they have joined forces with one of the biggest technology companies in the world, Google. The internet titan has launched a new advertising, online grocery shopping and delivery program with a number of major retailers such as Walmart, Target and Costco.
This new program allows retailers to display their products on Google search and through its smart, voice-activated assistant. Consumers can select products and collect them in Google’s universal shopping cart that routes purchases with its Express shopping delivery service. All retailers that are partnering with Google do not have to pay for the advertising, instead, they just have to give Google a cut of the purchases.
Although this new online grocery shopping service is unique when compared to traditional models such as Amazon’s, it allows retailers to stay on par with Amazon’s consumer reach. With over 3.5 billion searches every day, Google easily beats out Amazon’s 2.5 billion visits during March 2018. However, these numbers do not correspond to the number of purchases made using these two online shopping services. According to Market Realist, Americans who are searching for products online usually start their searches on Amazon instead of Google, which means that Amazon still has the upper hand in terms of e-commerce purchases.
However, Google Express is still growing and it allows retailers to provide consumers with a simple and consistent purchasing process. Along with Walmart, Target and Costco, Google Express has partnered with over 50 retailers including Kohl’s, Bed Bath & Beyond and Walgreens. These retailers get online exposure along with the added benefits of voice command orders made through Google Home devices and smartphones that are equipped with Google Assistant, which is available in over 400 million devices. So it seems that this new online shopping system benefits both retailers and Google itself as the tech giant tries to win back product searches from Amazon.
Google might have introduced this service right on time as Amazon has not yet become the grocery disrupter that everyone fears. Although the e-commerce retailer has enacted notable price cuts at Whole Foods locations for Prime members, Whole Foods still claims just a small portion of American grocery sales. In addition, AmazonFresh has been scaled back. However, these stats are set to take a turn as product sales are increasing by three percent year-over-year and 80 percent of Prime members are claiming that they intend to shop at Whole Foods more frequently.
As e-commerce pushes its way into the mainstream market, it looks like retailers have no choice other than to join the club in order to stay relevant. Since major grocers do not have as expansive of a reach when compared to Amazon, Google seems to be their best bet in competing with the e-commerce giant.