Walmart (WMT) has spent the past few years locked in an existential war with e-retailer Amazon (AMZN).
Part of the arms race in that war has been a giant ramp in technological and delivery capability as Walmart has successfully pivoted from just being a big box retailer to a formidable online presence.
And now, with inflation eating into consumers' grocery budgets as they modify their spending habits, Walmart has found a new way to monetize all the tech investments it has made over the past decade.
And it is partnering with cloud-based data software giant Salesforce (CRM) to do so.
“Through this partnership, retailers can leverage the same innovative and scalable technologies that power Walmart’s pickup and delivery experiences,” said Anshu Bhardwaj, senior vice president, technology strategy and commercialization, Walmart Global Technology.
The net result of the partnership?
The retailers that Walmart often outcompetes thanks to its scale and technological advantage will now have access to at least the company's tech.
This could mean mom and pop stores that have the same delivery capabilities that Walmart enjoys, giving consumers another option with the same convenience.
“The same technology that powers Store Assist has enabled Walmart to fulfill over 830 million* orders across over 4,700 Walmart stores. Together with Salesforce, retailers can scale their business and deliver the personalized, convenient experiences shoppers expect,” the company said in a statement.
Will Customers Bite?
Speaking of Amazon, the retail giant has done a similar thing in offering smaller rivals a chance to access its technology. But those efforts have seen mixed results.
In early 2020, Amazon began selling its cashierless checkout technology, nicknamed Just Walk Out, to potential rival retailers.
Amazon is the king of e-retail in the U.S., with an estimated 40% market share, according to eMarketer, but brick and mortar retail still accounts for about 85% of the industry.
Then in June 2022, the company announced that it will offer its Store Analytics service for sale, allowing brands to use a dashboard like the one on Amazon that show detailed, but anonymous, data about how their products were discovered.
Amazon has been accused of unfairly using partner data to further its own businesses , but the company insists that its Store Analytics data is aggregated and anonymized.
So while Walmart doesn't have the data collection capability or track record that Amazon does, the question is will smaller competitors trust the giant conglomerate with its customer data enough to make Walmart's "retail-as-a-service" play viable.
Retail-as-a-Service Revenue Stream
Traditional retailers have long struggled with the reality of bottlenecks in point-of-sale lanes and advertising that can't harness the power of data to be targeted.
At first companies like Amazon and Walmart built up their capabilities to alleviate those problems and give themselves an edge over competitors.
But now they are sharing their advances in an effort to create a new revenue stream, built on retail-as-a-service.
RaaS is "the engine that puts the critical transaction processing services, including complex store processing, in the cloud to be used by retailers to build the commerce experiences they need," according to Retail Info Systems.
Walmart sees an opportunity and the company, while playing catchup once again to Amazon's similar offering, is choosing now as the time to strike.
“Shoppers continue to expect brands to deliver highly connected and frictionless experiences across physical and digital touchpoints," said Rob Garf, VP and general manager of retail at Salesforce.
“With the combined power of Walmart and Salesforce, retailers can drive success with best-in-class technology to advance their omnichannel capabilities, drive efficiency and ensure that every purchase quickly gets into the hands of the shopper – no matter where they are.”
