Source: Home Depot
‘Okay Google, I want to order from Home Depot’
Google is on a retail roll. Home Depot announced it will join Google Express this fall with shoppers being able to place voice orders using Google Assistant with the tech giant’s Home speaker device or mobile app. The Home Depot announcement comes just a couple of weeks after a similar announcement was made by Walmart.
With two of the largest retail chains in the world moving into voice with Google, the question becomes of more a matter of when than if with others selling on the Express platform. Other retailers on Google Express include Bed Bath & Beyond, Costco, Kohl’s, Payless, Pier 1, Toys “R” Us, Ulta, Walgreens and others.
“We’re focused on delivering convenience and value as we continue to invest in best-in-class interconnected experiences for our customers,” said Kevin Hofmann, online president and chief marketing officer for Home Depot, in a statement. “Google has been a key strategic partner for us over many years and we’re excited to take our relationship to the next level with the Google Assistant and Google Express.”
Last year, Google and Home Depot made news when the home improvement chain announced it was moving some of its data to Google’s cloud. While a minor part of parent company Alphabet’s overall business, cloud services are among its fastest growing parts. Google’s cloud is third among similar service providers with Amazon Web Services (AWS) at the top followed by Microsoft Azure, according to Gartner.
While Amazon’s cloud is far and away the largest service provider, retailers have begun pulling back data with the realization that AWS profits are being used to help subsidize the company’s e-tail business. This flow of funds, many believe, has allowed Amazon to cut product prices and absorb shipping-related losses. Walmart, it has been widely reported, has pressured technology vendors to pull data from AWS.
Discussion Questions
DISCUSSION QUESTIONS: Do you expect to see many more retailers on Google Express to follow Walmart and Home Depot when it comes to ordering via voice with Google Assistant? Will major retailers working with Google affect Amazon Echo’s current market share lead in voice-activated speakers?
Poll
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
Yes, I expect more retailers to follow Home Depot and Walmart’s lead on Google Express and this will eventually give Echo some healthy competition. When it comes to retailer partnerships, Google has a significant advantage over Amazon — it doesn’t compete directly with retailers.
The Home Depot announcement is a real boon for Google as category variety and scale will be key to Google’s relevance. The backlash against Amazon is real in the retail world and retailers have viable non-Amazon options when it comes to platform partnerships. I expect that Amazon’s announcement that it is shopping for a site, and city, to call home for its latest mega distribution center is egging on the defections and alternative-exercising.
Other retailers may jump on board with Google, but how many will consumers make use of voice ordering for what they sell? I see this as more of a pushback against Amazon than a sales generator.
Google needed this partnership more than Home Depot but it has benefits for both.
Google has to move fastidiously to make something of Google Express, especially with the holiday season around the corner and almost guaranteed discounts on the Amazon Echo line of products pushing Alexa to deeper market penetration. Not to mention the now constant announcements of Alexa integrations, that all together, might cement Alexa’s insurmountable pole position.
I see some benefit to Home Depot, but they have so much more opportunity to go beyond this and integrate virtual assistants and assistance into their app and stores, that they might see (as I do) this being an easy near-term entry point with little downside.
Google Home and Google Express is where Kohl’s would have been wiser to place its long-term allegiance than with Echo/Alexa, as I stated in yesterday’s discussion. Google (Express) is needy whereas Amazon (Alexa) isn’t, meaning better opportunities to leverage Google and less cannibalization likelihood.
Siri, Cortana, Bixby, what?
Funny how the idea of sitting at a computer and placing an e-commerce order seems old school in 2017. We are barely seeing the tip of the iceberg in terms of commerce platforms and the move to such platforms. I think Google will see many more retailers jumping on board, and I think text and chat-based commerce is also set to see big gains.
I think you view this as a new channel of doing business. In the same way that customers are buying from Amazon, eBay, Walmart.com and any other site, retailers need to be on these sites to ensure distribution is covered.
I think the real battle begins when marketing dollars start flowing towards voice ordering. At that point, retailers may need to choose Echo or Google, but for the time being it makes no sense not to work with Google and Amazon.
The other thing to think about is developing a stance on voice ordering. Jumping in with either Amazon or Google helps to build market inertia. Having said that, the questions are still: is voice ordering beneficial to all brands or retailers? Or is it niche to certain products?
Retailers’ backs are against the wall and due to desperation they will try anything to get a seat at the table — even if it’s at the little kids’ table! The Home Depot addition is interesting. In principle, the process seems reasonable but I foresee many challenges in its actual practice. Voice recognition is certainly getting better but we’ve all had frustrating experiences (many times humorous) just asking Siri to call Tom Sheetz mobile. What do you think will happen when someone orders:
… You get the point. It’s all a wonderful experiment to work through all these wonderful technologies. For now, it makes for great PR and blog fodder.
It’s great to see a continued push with voice commerce. Advanced order management systems are already capable of integrating with Google Assistant, for example. The next cool step will be to see voice commerce where a customer can order a product from a retailer like Home Depot and have it ready for pickup at the location nearest them. Another stage in the omnichannel retail cycle. Exciting times.
I wonder what happens if you ask Alexa to buy something from Home Depot or Walmart. Or if you ask Google to buy you something from Amazon. I get why retailers would use Google rather than Amazon’s product but, from a consumer perspective, they should overlap — right?
As a consumer, I don’t give a damn what AI program you run, I just want you to help me purchase whatever, whenever, however. It seems like another issue where retailers are thinking of themselves first, as digital immigrants are wont to do.
I think this move signifies something interesting: namely that the battle of the platforms between the big technology players will create a lot of opportunities for retailers and will help them fight back against Amazon. In this respect, it’s inevitable more retailers will sign up.
The advantage for Google is that its Express service is more like a mall that provides a selling environment which does not really compete with the retailers. Amazon is more of a department store: a retailer can sell things there, but it has to compete with a lot of Amazon’s own stuff and possibly has to accept that it is not going to get prime position or billing.
Like it or not, commerce is going to be frictionless. Companies will continue to find new ways to serve customers’ desire for speedy service and delivery. Retailers who can keep up will reap the benefits, while those who want to cut their IT budgets (you know who you are) will fall behind. It’s retail Darwinism.
This makes sense for both Home Depot and Google, but it’s Google that benefits the most in trying to establish both their Home product and Google Express to the mainstream consumer. That’s something Amazon has already succeeded at doing with Alexa and the Echo devices. Here’s the test — ask anyone you know who isn’t “in the know” in the retail industry if they’ve heard of Alexa and the Echo device and if they know they can order goods from Amazon with it. Most will tell you yes they’ve heard of it, some will say they have a device and some will say the know they can order things. Then ask them if they’ve heard of the Google Home device and Google Express. While some will have heard of the Home device, I expect most will not be familiar with Google Express. And that’s why Google needs more retailers like Home Depot to come on board.
Retailers will definitely join them in their battle with Amazon purely as a knee-jerk reaction. I can only imaging what they may do if Apple gets into this game with their soon-to-launch HomePod smart speaker. (My money is on Apple creating a way for retailers to use their existing iOS apps to enable voice ordering in the future as the ultimate integration.)
The question we need to answer is whether or not consumers will be willing to have multiple devices like these in their homes. Once someone buys an Echo device, what will cause them to either replace or add a Google Home to their house?
We’re still in the early phases of voice commerce, but I’m sure Home Depot isn’t going to be the last retailer to offer shopping via Google Assistant. Google is benefiting from retail’s pushback against Amazon, but also hopefully customers will be benefiting from deals like these by giving them more options when shopping — whatever the device, operating system, location, etc.
This is yet another channel for consumers to buy. Traditional retail is still traditional, but the innovation of different ways for consumers to connect with their favorite retailers is broadening. Google Home vs. Echo … Is it VHS vs. BetaMax? Is there room for both? (Probably!)
Retailers who jump on board with Google Express or Amazon Echo assume:
There is no doubt there will be a place for voice-activated retailing in the future. Outside of the politics of Amazon, Google and Walmart, what we are really seeing are attempts by retailers to catch up with their customer’s not so new ways of digitally shopping. Various technologies are now the new flavor of the day.
Amazon is about to get a much needed look at what competition is. Their investors should be worried about whether they can handle a qualified market share loss.
Retailers follow consumers. If they go to Google Home, then retailers will develop partnerships with Google Home; likewise with Amazon Alexa and so on, never limiting themselves to one partner but connecting with every major in-home digital device, ensuring customer coverage across the emerging marketplace. Brands will simply be wherever the consumer chooses to shop.
One factor we should also find very interesting, when it comes to these new interfaces, is the evolving state of the data that drives them. In Amazon’s case, the company has powerful data already — search data, purchase data, location data, etc. As for Google, it is traditionally associated with search but with these types of retailer relationships coming to the fore the company will have increasing access to purchase data across categories. Add in knowledge of price points paid, promotional dynamics in play, purchase frequency, and the like, and this will enable Google to further catch up to the data advantage that Amazon has historically enjoyed.
All this being said, actual purchase volumes may well be lower than expected until the process is both easier and more dynamic. Voice purchases are fine if you already know exactly what you want or need. But before buying something, for example, won’t consumers still like to look at it? Perhaps Google Home could create an AR image of the product on a wall or feed images to a screen. And, lastly, the cooperative spirit of these business relationships is encouraging from a consumer-experience standpoint, yet it introduces important questions to be addressed around data rights, transparency, consumer control.
I have said this before, that ordering via voice really does feel like the “magic” of the internet fully realized. While product exploration is still a significant challenge, as is the requirement to memorize skills, I still can’t see any way that conversational commerce isn’t a significant shopper channel in the near future. It’s simply too easy — the definition of frictionless.
This reminds me of digital payments or loyalty schemes. What about shoppers that prefer to use Amazon’s platform? Just exclude them? Retailers are still laboring under the illusion that they are in control and can manage the shopper’s path. Remember all the retailers that pulled away from ApplePay? How’s that going? Any mention of channel specific systems Walmart Pay or WMX? Nope, it isn’t relevant to shoppers.
This discussion reminds me of digital payments and the ApplePay conversation from a few years ago. What does the shopper want? It’s doubtful that it’s a channel specific system but rather choice to shop how they choose. It’s an arrogant position IMHO to seek to force shoppers to use channel specific solutions. They are in control now, not the retailer.
Big retailers are ready to invest a lot of money to disrupt and be able to say that they do care about user experience. But such projects do not last that long — from one to two years. And after that it all will depend on this tech-to-order conversion and its profitability at the end. Omnichannel is not about quantity of touch points but the quality and value that a touch point gives.