Curious about the implications of the Albertsons-Google partnership announced this week?
We spoke with two grocery retail experts to get some perspective on how significant this is for the industry, what new capabilities represent incremental change versus transformational change, and what other areas have truly transformative potential.
Check out the first segment of this article for highlights from the news release, then keep reading for analysis of the news.
Announcement
A multi-year partnership between Albertsons and Google will leverage the latter’s artificial intelligence tools and other technologies with the goal of creating a more convenient shopping experience.
“Albertsons Cos. is continuing to transform into a modern retailer fit for the future, and we are leading the industry forward by providing the easiest and most exciting shopping experience for our customers,” Chris Rupp, executive vice president and chief customer and digital officer for Albertsons, said in a news release. “In bringing together Google’s technology expertise with our commitment to customer-centric innovation, we’re providing our customers with a superior shopping experience no matter how they choose to shop with us.”
The release mentioned integration with Google Search and Google Maps, plus use of Google Cloud technologies including Vision AI, Recommendations AI and Business Messages, as examples.
“Albertsons Cos. is leading the way in bringing innovative technologies to the grocery store digital and physical aisle,” Carrie Tharp, vice president of retail and consumer for Google Cloud, said in the release. “We’re proud to partner with Albertsons Cos. to streamline processes and power innovative shopping experiences for customers. The unique strategic and technical collaboration at the heart of the Google and Albertsons partnership sets the stage for sustained post-pandemic transformation and momentum that will become clear to customers in both the near- and long-term.”
Analysis
The examples provided in the news release – shoppable maps, conversational commerce and predictive grocery list building – aren’t groundbreaking. Most of the major grocery retailers in the U.S. are working on capabilities in these areas, said grocery retail and supply chain expert Brittain Ladd.
“This is just another example of grocery retailers really trying to find a way to leverage technology to help improve shopping experience,” Ladd said. “So do I believe it will have a benefit to Albertsons customers? Yes. Do I believe that what Albertsons and Google are doing is somehow leading-edge or better than the other programs out there that I’ve seen Kroger do or that Amazon will be doing or H-E-B or other companies? Not really.
“It’s great that Google and Albertsons are partnering, but I really need to level-set everybody,” Ladd said. “This in no way, shape or form is somehow going to propel Albertsons to the top of the list as far as technology or being able to create an experience that nobody else has.”
Bill Bishop, chief architect of retail consulting firm Brick Meets Click, also described the capabilities outlined in the release as incremental rather than transformational.
Given the aspirational language of the news release, however, it is certainly possible that Albertsons and Google have more ambitious plans than they are disclosing.
“I think they’re circling around some big ideas,” Bishop said.
Table stakes for retailers today include understanding who their customers are, what they want, where they are located, what they are buying, and using that information to personalize their shopping experience, Ladd said. He suggested the involvement of Google would have much more significant implications if the tech giant had broad reach into the overall operation.
“Right now, Google’s in their comfort zone,” Ladd said. “To an extent, Albertsons is in their comfort zone. This is a partnership, they’re going to leverage some technology, but the big disappointment to me in this is that it’s Google doing the same thing they always do, they help enable the retail, and I believe what Google should do is become a retailer by making a big bet by acquiring one of the major retailers out there.”
Bishop also noted that incremental changes like the ones mentioned in the news release, designed to improve the relationship between the buyer and the seller, are useful but not game changing. They allow the retailer and the shopper to do more quickly or more easily what they’re currently doing versus fundamentally changing what is done.
If the partnership turns out to be more comprehensive than what’s outlined in the release, it could have some big implications.
“To me that’s very different from having tech companies sell you something,” Bishop said. “This is a collaboration, and I think the power of the idea is in the partnership and collaboration. The thing that makes it important in my mind is that it’s almost impossible for a grocer or a wholesaler to invest in the technology they’ll need by themselves, so it being a first indication of a partnership or collaboration I think shows the way that others are going to be going in the future.”
Both Ladd and Bishop noted operational changes among shifts that could be truly transformational for the industry. Ladd mentioned automated microfulfillment centers designed to reduce costs and improve ability to meet demand, and Bishop noted that digitization in the supply chain is still a big opportunity.
In the area of consumer experience, Bishop described a new level of service to the shopper as what will create longer-term differentiation for grocery retailers. Integrated tools for meal planning with health in mind and with budget in mind are examples of ways retailers can add value and drive loyalty by addressing key consumer pain points.