U.S. Markets closed

Retail-Tech Partnerships Gain Steam: Should Amazon Worry?

Shilpa Mete

Amazon AMZN is going all out to bolster its presence in the grocery retail market. The company’s endeavors are supported by its distribution strength, the acquisition of Whole Foods and the establishment of its cashier-less store, Amazon Go.

Further, its strengthening grocery pickup and delivery services along with availability of Prime Savings at all Whole Foods Stores and Whole Foods Market 365 stores nationwide is a key catalyst for the company.

However, Amazon recently slashed prices at Whole Foods that shows the cutthroat competition this Zacks Rank #2 (Buy) company is facing from big retailers like Walmart WMT, Target TGT and Kroger KR to name a few.

These retailers are flexing their muscles against Amazon with support from tech giants like Alphabet GOOGL and Microsoft MSFT. Further, they are ramping up their initiatives to strengthen their grocery services.



Walmart-Google Partnership Poses a Challenge for Amazon

Like Amazon, which offers the comfort of grocery shopping with voice commands using its Alexa, Walmart has introduced Walmart Voice Order that allows customers to place their grocery orders just by saying “Hey Google, talk to Walmart” using Google Assistant.

With the availability of Google’s voice assistant on several devices including Android phones, iPhones, smartwatches and Google Home Hub to name a few, Walmart’s customer base is likely to increase. Users will be able to do grocery shopping from anywhere.

Additionally, Walmart, which has a Zacks Rank #3 (Hold), also enables customers to shop for products listed on Google Express through voice commands.

Target, Kroger Also in the Fray

Another retail giant, Target partnered with Google to allow its customers enjoy voice shopping on Google Express in the United States. Further, there is a possibility of integration of Target’s REDcard, a payment card, into Google’s shopping platform. This will help the Zacks Rank #2 stock to deliver an enhanced shopping experience. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apart from the voice shopping initiatives by Walmart and Target, Kroger, which carries a Zacks Rank #3, recently joined forces with Microsoft to take on Amazon's cashierless concept. Kroger will leverage Microsoft Azure that serves as the most preferred cloud platform for Retail as a Service (RaaS).

Kroger is gearing up to establish two connected grocery stores with a new feature called EDGE Shelf (Enhanced Display for Grocery Environment) – digital shelf displays with real-time prices, promotions, nutrition and dietary information at two locations – Monroe, OH and Redmond, WA. Store specific data will be stored and processed on Microsoft Azure.

Nevertheless, Amazon is likely to dominate at least in the near term owing to its rapidly increasing number of Amazon Go stores across the United States and focus on introducing cashierless technology in other countries as well.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>