Industry Insights

Walmart & Microsoft Team Up in Joint Interest to Beat Amazon

At Microsoft’s Inspire partner conference last week, Walmart announced that they are partnering with Microsoft to use their cloud service offerings to improve Walmart’s forecasting, purchasing, and data-sharing abilities.

Walmart, the world’s largest retailer, has agreed to a five-year term with Microsoft to use their cloud technology and artificial intelligence to optimize its workflows by integrating its data more deeply into Azure.

The company hopes that new AI and machine learning algorithms will make it easier to streamline deliveries and cut costs as it continues to expand its online offerings. Those now include grocery pickup, smart home tech installation, and more, in addition to traditional online purchases.

Microsoft is reportedly also working on a technology that could be used to power check-out free retail stores which is a perfect fit for Walmart shoppers. Sound familiar? You may remember when Amazon launched their first cashier-free convenience store in Seattle, Washington back in January 2018.

Since Walmart is Amazons biggest retail competitor and Microsoft is its biggest cloud computing competitor – what does this mean for Amazon?

With their recent purchase of Whole Foods last year for nearly $14 billion, Amazon became the second biggest private employer in the country behind Walmart so, even though Walmart is chasing Amazon in some respects, Amazon is till nipping at the heels of Walmart in areas Amazon lags behind. 

There is definitely a valiant effort being performed by Walmart to excel in every respect, but if they truly want to catch Amazon, here’s a closer look at what they should be doing.

A Closer Look at Amazon’s “Amazon Go” Technology

Years ago, we all wondered what shopping would look like if you could walk into a store, grab what you wanted, and just walked out. What if we could weave the most advanced machine learning, computer vision and AI into the very fabric of a store, so you never have to wait in line, no checkouts and no registers. Well, fast forward to 2018 when you can now use the Amazon Go app when you enter, put away your phone and start shopping.

Amazon Go is a technology that uses computer vision, deep learning algorithms and sensor fusions — many of the same advances being used to develop self-driving cars.

The app keeps track of what you pick up and put back on the shelves, and charges you for your final items when you leave through sensing gates. All you do is just sign in with the Amazon Go app when you enter the store and shop as you normally would.

On the back-end, Amazon's technology detects everything you're taking or returning to shelves, all while keeping track in your virtual shopping cart. When you walk out, Amazon charges your account and sends you a receipt.

Here’s a quick video tutorial that shows you exactly how the system works.

CNBC’s Deirdre Bosa went to the launch of Amazon Go in Seattle, Washington, where she tested the “Just Walk Out” technology and let’s just say there was a yogurt cup that was accidentally dropped from her checkout list.

Amazon and VP of Amazon Go, Gianna Puerini responded to Deirdre when she confessed and said "First and foremost, enjoy the yogurt on us," said Gianna "It happens so rarely that we didn't even bother building in a feature for customers to tell us it happened. So thanks for being honest and telling us. I've been doing this a year and I have yet to get an error. So we've tried to make it super easy on the rare occasion that does happen either to remove it or enjoy breakfast on us."

Well played Amazon, well played.

Amazon Sweeps Up PillPack Deal From Walmart

In late June of this year, Walmart was ready to buy PillPack, a full-service online pharmacy start-up that delivers a better, simpler experience for people managing multiple medications.

Sources said that PillPack and Walmart were in talks for months about the acquisition for less than $1 billion, but Walmart was too slow on making a final offer. When CNBC reported the deal in early April, Amazon, which had previously been pitched, moved in and stepped up with an offer for around $1 billion in cash, according to a source familiar with the discussions.

This acquisition will allow the ability for Amazon to ship prescriptions around the country, and overnight, making it a direct threat to the more than $400 billion pharmacy business. CNBC actually showed signs of the threat stating “Rite Aid, Walgreens and CVS Health lost about $12.8 billion in market value on Thursday alone.”

The acquisition is said to close during the second half of the year.

Also according to CNBC The start-up has raised $118 million in funding from investors including CRV and Menlo Ventures, and it reached more than $100 million in revenue in 2017, the company has said. In 2016 it was reported to be valued at $330 million.

The company previously had sale talks with Walmart, which had considered buying the start-up for less than $1 billion, CNBC has reported.”

Ending Notes

Amazon’s valuation briefly jumped above $900 billion on July 18th after it reported selling more than 100 million products on Amazon Prime Day. According to Reuters, the company’s shares hit $1,858.88 that day, giving Amazon a stock market value of $902 billion to be exact.

Apple’s value hovers just under $940 billion. It’s long been expected that Apple would be the first company ever to achieve a market cap of a trillion dollars, but as of late there has been increasing speculation that Amazon may get there first. Who do you think will make it to the trillion dollar mark?

In the first quarter of 2018, of just over $1.2 trillion total in retail sales, only $114 billion, or 9.3%, came from e-commerce. Based on estimates from research firm eMarketer, TechCrunch reports that Amazon’s sales now account for nearly half of all US e-commerce sales. Media sources say Bezos has a net worth of $138 billion as of June 28, 2018, making him the richest person in the world.


Gabriella Pirrone

Gabriella Pirrone

Gabriella is the Digital Marketing Assistant for CMSC Media. She brings a wealth of knowledge from not only a CMS perspective but also content, SEO and eCommerce. She enjoys everything social media and staying ontop of the latest trends in the digital marketing world. 

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