BLOG

Google and Walmart Team up to Battle Amazon Prime

Walmart is a distant second behind Amazon when it comes to online sales. Formerly a huge chain, Walmart has been faltering in the age when people can buy everything in one place and have it delivered to their home within two days thanks to Amazon Prime.

Starting in late September, Walmart will make hundreds of thousands of items available on the Google Express app and website, while Google will be ending its $95 annual membership fee for the service, CNET reported. Google Express, which lets people shop at stores and get items delivered to their home, has also partnered with Target and Costco in the past without much success.

When Google ends the membership fee, shoppers will be able to get deliveries shipped for free as long as their order totals hit a certain minimum.

Companies need to reinvent themselves every five years or so to stay relevant, Glenn pointed out on radio Thursday. While Walmart’s “buy low, stack high, sell cheap” philosophy worked, the business model must change for the chain to be able to compete.

“What they built is no longer what the world is using,” Glenn said.

Companies are realizing that they need to get on board with the 2017 consumer’s on-demand mindset, and the market seems to be consolidating into just a few names: Google, Facebook, Amazon. Are we being brainwashed to accept that Google runs our lives?

“I have learned that there’s a better way, and it is Google,” Glenn joked.

GLENN: Okay. Google and Walmart are now teaming up. Amazon wasn't invited.

Amazon, the largest online retailer and a big reason physical stores are now struggling, Walmart is the largest offline retailer and is a very distant second when it comes to online sales. They've been trying to make up the difference for years now.

Walmart is really, really struggling hard. They're getting beat to death. And in -- where is it? Bentonville. Bentonville, the layoffs are really quite intense as you're going to have to reinvent yourself every five years. And what they built no longer is what the world is using.

Now, they're teaming up with Google. And they're going to sell their products on Google Express. This is Google's digital shopping mall, where you can buy things -- you know, Target, Costco, Walgreens, et cetera. The partnership lets shoppers order from Walmart, using Google Home, just like Amazon's Echo.

So now what does this mean? This means for Walmart that they're going to have, you know, more customers, and they're going to slide into Amazon's territory. Is Amazon -- now it's Amazon and Google going to head-to-head. And, everybody, if you want to stay -- I think if you want to stay in business, you better get on the Amazon train or the Google train or some train because all the trains are leaving the station, and they're all run by these four companies.

PAT: Got calls into Facebook right now.

GLENN: Yeah.

STU: Just submit. I think that's the easier way. Just submit.

GLENN: It is. It is.

I have learned that there is a better way, and it is Google.

PAT: At first, I thought there wasn't, but they convinced me it's the only way to go.

STU: Did you see Amazon Instant too? Which, they're going to be doing these lockers they're setting up at gas stations. And you can just order and, like, a minute later, two minutes later, go pick it up at a place. So like if you're driving back, you're getting gas.

PAT: Yeah, but I don't want to pick it up. What do you mean, I have to go pick it up?

STU: I know. It's like, what's the fastest way you can get something?

GLENN: What do you mean these lockers?

STU: They're like setting up -- almost like gym lockers. All these, like, basic necessities. They're doing it particularly in college towns. But, like, basic necessities you might need, instead of having to order -- you know, to get them delivered from the store, which Amazon Prime now can take up to, like, two hours. So who can wait that long? And so you can just, you know, stop by on your way home. Or walk by one of these lockers and pick up whatever the necessity is that you need.

PAT: Jeez.

GLENN: Okay. So now here's -- here is another big change that is coming to America: Have you ever heard of Lidl. L-I-D-L? Lidl. It's a European grocery chain.

You heard about this?

JEFFY: Yeah. It's a new store.

GLENN: Have you seen one yet?

JEFFY: I saw pictures.

GLENN: Okay. They are 9 percent cheaper than Walmart.

PAT: Wow.

GLENN: Nine percent cheaper.

And they offer products as -- as much as 50 percent less than rival stores. But on the average, 9 percent less. You know, 10 percent is a lot of cash.

PAT: Where are their products being made? Walmart's are all in China. Are they making them in Bangladesh? Where are these being made?

JEFFY: Yes.

GLENN: So here's how they do it: Most the products they have are private label brands. Ninety percent of products in little stores are private label brands, products manufactured specifically for Lidl.

So it's a name you can trust. Two, they have a limited selection of products. They, instead -- I mean, right now -- remember -- remember I told you that -- what was it? Ten or 15 years ago, the most elaborate grocery stores had between ten and 20,000 products on the shelves.

The -- the -- the nice grocery stores, the really -- you know, really nice grocery stores have 60,000 different products on the shelves.

JEFFY: That's too much. There's too many options.

PAT: No, there's not.

JEFFY: That's too many options.

PAT: That's great.

GLENN: Lidl only has 2,000 products.

PAT: Oh, wow. That's a big difference.

GLENN: It stocks the fast-moving items, the things that people buy most often. So they're limited to the fast-moving items, which means they don't have the money tied up in inventory. Their stores are relevantly small on average. They're 20,000 square feet, which is larger than most European stores. But a quarter the size of the traditional US supermarket, like Kroger.

It also has very few staff members, so it is automating an awful lot of stuff. And, oh, my gosh, that's evil. They're saving me money.

It displays all the -- the products in the boxes that they came. And they cut costs by building one wall of the store and sometimes two walls of the store, with nothing but glass. And that way, it's all natural light that's coming into the store, and they don't have to spend so much money on lighting.

PAT: Wow.

GLENN: Yeah. I mean, they -- they look at --

PAT: Wow.

GLENN: They looked at every way that the grocery store was inefficient and wasteful. And they don't spend a ton on ads. That's how they're -- that's how they're 9 percent cheaper.

JEFFY: They have Heidi Klum as the spokesperson.

STU: Do they really?

GLENN: Do they?

JEFFY: Yeah, she's their big front person now, coming into the states.

PAT: I mean, things are changing at such a breathtaking pace. Things are changing for, you know, retail outlets, for malls, for grocery stores.

GLENN: Everything.

VIDEOS

WATCH: This is the Maybach Ultimate Luxury SUV (2020)

Mercedes-Benz is presenting the Vision Mercedes-Maybach Ultimate Luxury. The design of the crossover, based on an exclusive high-end saloon and an SUV, follows the philosophy of Sensual Purity.

The show car combines the comfort and typical strengths of both body styles. These include the raised seating position and the athletic looks. The Vision Mercedes-Maybach Ultimate Luxury is conceived as an electric car. Thanks to its four compact permanent-magnet synchronous motors, it offers fully variable all-wheel drive. The output from the powertrain is 550 kW (750 horsepower). The flat underfloor battery has a usable capacity of around 80 kWh, producing an NEDC range of over 500 kilometres (according to EPA: over 200 miles). The top speed is electronically limited to 250 km/h (155mph).

The fast-charging function is also convenient: thanks to DC charging based on the CCS standard, the system allows a charging capacity of up to 350 kW. In just five minutes, enough power can be charged to achieve an additional range of around 100 kilometres (62 miles).