Home Depot Partners with Google While Kohl’s Chooses Amazon
Retailers are lining up behind the tech giants that are shaping the voice shopping era. Two weeks ago, Google announced a partnership with Walmart to bring more voice shopping options to Google Home and Google Assistant users. Yesterday, The Home Depot announced it will join Google Express this fall. Google Express is a shopping service modeled in part on Amazon Prime, but without the annual fee.
The Home Depot will join Google Express this fall, adding the ability for its customers to shop through voice with the Assistant on Google Home, making it more convenient than ever for customers to shop however they want.
Cutting into Amazon’s Shopping Advantage
Everyone now recognizes that shopping is a big advantage for Amazon in regards to adoption of the Alexa voice assistant and in providing a robust monetization option. CIRP estimated that Amazon Prime members increased their annual Amazon.com spending by 10% after acquiring an Amazon Echo in 2016. Despite protestations by Jeff Bezos to the contrary, shopping is a big deal when it comes to voice assistants. A Morning Consult poll from August found:
Thirty-three percent of people who own a voice-activated device such as the Amazon Echo or Google Home said they use it for ordering products and shopping online.
Amazon is famously the “Everything Store,” as in you can buy everything there. For Google to compete, it needs to amass a comparable range of products. The Walmart relationship fills a big gap. The Home Depot offers significant merchandise depth in the home improvement category. Google still has to work through a number of challenges such as building awareness around Google Express and teaching consumers that they can order from a variety of retailers. It is not as simple as saying to Echo users to just order off of Amazon.com like you normally do. However, Google is making the right moves to provide shopping breadth and depth by arranging partnerships with the largest and fourth largest U.S. retailers by sales volume.
Amazon Expands Brick-and-Mortar Presence
The Kohl’s deal with Amazon may be even more compelling. According to Bloomberg, Kohl’s will set aside:
1,000-square-foot Amazon areas in 10 of its locations, offering gadgets like the Echo voice-activated device and the Fire tablet. The new store-in-store concept, dubbed the Amazon Smart Home Experience, will begin appearing next month.
The Hope Depot deal seems like a logical move after the Walmart deal if you understand the Google Express model. Both parties get what you would expect. Google can offer Google Home and Google Assistant users more voice shopping options while The Home Depot gets access to voice shopping from a major platform. By contrast, Kohl’s competes with Amazon and it is not looking for a new online sales channel. It is planning to stock Amazon products in order to drive foot traffic to its stores. Amazon in turn gets a new channel to sell Echo and a variety of devices in a brick-and-mortar setting.
This announcement of Amazon’s physical retail presence in Kohl’s comes just a week after Amazon took ownership of another physical retailer, Whole Foods. The same morning the acquisition was finalized, Whole Foods shoppers could purchase Amazon Echo from promotional displays in many stores. The Whole Foods acquisition was primarily about Amazon’s ambitions in grocery sales. However, it is clear that Amazon is not content to only dominate online sales. The company wants to have a big physical presence as well this Holiday shopping season. I now expect to see more retailer deals for both Google and Amazon in the next month.