Amazon and Google Go Another Round in the Digital Retail Fight

SEATTLE -- The merging of digital and traditional retailing continued this week as Amazon and Google each threw fresh punches in their aggressive plans to expand into brick-and-mortar retail.

In one corner, Amazon announced a new partnership with Menomonee Falls, Wis.-based Kohl's, which will host Amazon mini shops in 10 of its locations. In the other, Home Depot has partnered with Google to allow customers to shop for Home Depot items through its Google Home smart speakers and Google Express website and mobile app starting this fall.

These announcements are further examples of the blurring of the lines between brick-and-mortar and online retailers. Amazon’s store-within-a-store concept will make it easier for consumers to purchase Amazon products without the wait time, and the devices consumers buy will encourage them to make more online purchases.

Home Depot’s partnership with Google, meanwhile, means that consumers will have another way to buy home improvement products online. The move sounds similar to Google’s recent partnership with Wal-Mart.

If tech companies continue to partner with brick-and-mortar retailers to more effectively hawk each other’s wares, what’s to stop convenience stores from forging similar partnerships? Would it be so strange to see Amazon technology sold in a Sheetz c-store, or to order Casey’s pizza through Google Home?

Click through for more details on these click vs. brick partnerships and the implications for c-stores …

Amazon will sell its branded electronics, including the voice-activated Echo smart speaker and the Fire tablet, in 1,000-square-foot stores within 10 existing Kohl’s locations in the Los Angeles and Chicago areas beginning in September. The shops have been dubbed the Smart Home Experience.

The partnership allows Kohl’s to “ride Amazon’s coattails,” according to Bloomberg. The brick-and-mortar retailer’s shares were up 4.9% to $42.37 on Wednesday due to news of the deal. Bloomberg points out that while 10 stores won’t make any noticeable difference in sales, it could be the beginning of a more involved partnership down the road if it's successful.

“We believe in the power of our store portfolio and know that our future as a best-in-class omnichannel retailer will be driven by how inventive, compelling and unique we can make our store experience,” said Michelle Gass, Kohl’s chief merchandising and customer officer. “Kohl’s and Amazon share a customer obsession and we’ve joined together to leverage each other’s strengths and deliver a great experience customers can only find at Kohl’s.”

The ability for consumers to order Home Depot products through Google Home or Google Express gives Home Depot another avenue in which to sell to customers. It also gives Google another retailer partnership with which to compete with Amazon. Google recently shed its $10 monthly membership fee for Google Express when it partnered with Wal-Mart, signaling that it wants to compete with Amazon’s low-price model.

“We’re focused on delivering convenience and value as we continue to invest in best-in-class interconnected experiences for our customers,” said Kevin Hofmann, Home Depot's online president and chief marketing officer. “Google has been a key strategic partner for us over many years and we’re excited to take our relationship to the next level with the Google Assistant and Google Express.”

If partnerships such as these persist, it won’t be long before most every retailer in America has a relationship with a large tech company that allows them to more easily put their products in customers’ hands.

With their convenient locations, commitment to customer service and increasingly popular small footprints, c-stores are uniquely positioned to take advantage of the blurring between physical and online retail. This could take any number of forms, from serving as a pickup point to offering products through Google Home or helping e-commerce firms get their products to customers faster.

Whatever the case, physical retailers and online firms are cozying up together more to better serve customers. There may be opportunities for convenience stores to do something similar.