In the world of retail, and particularly ecommerce, last month should have been all about Amazon Prime Day. Instead, it was another headline that stole the show. As Forbes put it when news of the Walmart/Microsoft deal broke, “Walmart’s New Microsoft Deal, Not Amazon Prime Day, Was The Most Important Event In Retail Last Week”.
The overall details of the 5-year deal are centered around 3 key pillars:
Digital transformation: primarily focused on leveraging Microsoft’s public cloud to take advantage of Microsoft’s compute capacity, to seamlessly manage workloads in an elastic environment, to innovate faster, and to manage costs through a more cloud-native environment.
Innovation: This includes site availability and speed, the launching of new features, cost savings from IoT optimizations like connected HVAC and refrigeration units to reduce energy usage, and applying machine learning when routing delivery trucks.
Changing how Walmart works: Walmart aims to “continue to foster a curious, collaborative, accountable, and agile culture to position the company for further growth”. According to the company, “Microsoft’s modern workplace platform supports connected teams and breaks down silos – with access to a full range of tools including Microsoft Workplace Analytics, Microsoft Stream, and Microsoft OneDrive, Walmart associates will have access to leading collaboration, productivity and sharing tools so they can save time and work better”.
The partnership also allows for Walmart and Microsoft engineers to collaborate on the assessment, development, and support phase of moving hundreds of existing applications, including migrating a significant portion of walmart.com and samsclub.com to Azure.
Why Walmart? And Why Microsoft?
The question of why Walmart is partnering with Microsoft sheds light on the bigger story, which goes all the way back – or forward – to the future of retail and ecommerce.
There is no doubt that the stores of the future are going to look nothing like what we know today. Amazon Go, for example, has already offered a taste of what’s on offer, but advances in technology mean that this concept is by no means the ultimate goal.
As companies are able to process more data, and use tools like artificial intelligence and machine learning to make sense of this data, learn from it, and make practical data-driven decisions, so the possibilities of the future of shopping open up.
Walmart is keenly aware of this. Blessed (or cursed), with a massive footprint of retail stores and as one of the only retailers who can rival Amazon in size, or revenues – Walmart’s 2017 sales surpassed $500 billion for the first time, making it almost three times bigger than Amazon – Walmart is making all the moves it possibly can to get a sizeable chunk not only of current retail revenues, but those in the future, too.
When Amazon acquired Whole Foods, it was a shot across the bow of Walmart. With groceries making up the core of Walmart’s revenues, the company realized that it had better make some smart moves, and fast, before they were outplayed completely by the Amazon juggernaut.
These 2 big players know that whoever can leverage technology better has a massive advantage, particularly when it comes to the hybrid online/brick & mortar store concept, which both of these behemoths have shown is an integral part of their strategy going forward. While Amazon started as a tech company and then grew into this hybrid model, Walmart had everything to catch up on when it came to technology, hence the Microsoft partnership. This match makes sense from a number of perspectives. When it comes to the cloud, Microsoft’s offering is one of the strongest. And one of the other leaders in cloud technology, Amazon’s AWS, is unlikely to be considered by Walmart, for obvious reasons.
The Challenge: Catch Amazon
Amazon has been first-movers up until now from a technological perspective. Whether it’s the Amazon Go concept store or some of their now-legendary patents.
Their Prime Day showing was impressive, irrespective of some mild technical issues. More than this, however, is the fact that Prime Day exists at all. This is a relatively new and completely made-up holiday, by the only brand that has the power to do so. Experts have expressed concern that if a Prime Day were to be timed to take place just before the Black Friday/Cyber Monday weekend, it could change the face of shopping, particularly in the US, forever, as the wind would completely be taken out of the sails of any competitors.
With expansions rumored in industries as diverse as gas stations and travel, Amazon is not letting up in its quest to become the ubiquitous name and go-to point for consumers and is intent on leaving potential competitors like Walmart way behind in their dust.
Data And Tech In eCommerce
With these retail giants constantly trying to outmaneuver one another, one thing is a constant: the use of technology to get – and stay – ahead.
When it comes to planning for tomorrow, it doesn’t matter who you are – from Amazon and Walmart, to any other organization that uses the internet to do business – leveraging technology and data, and having the right partner to make sure that your decisions are data-driven, are critical.
Market Beyond is your natural partner when it comes to these decisions. With real-time, actionable, product-level insights, you can gain an unfair advantage to blast your ecommerce operation into the stratosphere. Take advantage of the technology available, and ensure you’re leading the race for the future of commerce.
Sign up to our newsletter to get the latest news about Market Beyond