Wal-Mart Stores Inc. ended its relationship with Google Inc. after the Internet search provider asked the retail giant to share its inventory and pricing data, according to a news report.
Concern over sharing pricing information was particularly worrisome for Wal-Mart, the Wall Street Journal reported Thursday.
That the two corporations are at odds over data is no surprise to Carol Spieckerman, president of retail strategy firm newmarketbuilders. Spieckerman said the interaction between retailers and technology companies is evolving by the day.
"The conflict between Wal-Mart and Google speaks to a larger ongoing struggle in retail, that of platform leverage," Spieckerman said. "Retailers are no longer just places that sell products, they are quickly evolving into technology platforms, or at least that holds true for the more forward-looking retailers such as Wal-Mart. That means that their reliance on, and relationships with, other technology platforms will continually evolve."
A Wal-Mart spokesman, responding to a request for comment, said "we don't discuss our conversations with suppliers. We do have a strong multifaceted relationship with Google." Google could not be reached for comment.
Google uses its Local Inventory Ads to make "local stores and inventory accessible to people shopping online." It launched the service in October 2013. To participate in the service Google asks advertisers for information related to inventory and pricing, although specific inventory data are not required.
Google currently provides ad services to Macy's Inc. and Office Depot Inc., among others.
Data -- collecting it and turning it over -- make up the biggest challenge for using Local Inventory Ads, according to Mercent, a Seattle firm that specializes in online retail.
"You must send accurate store-specific product data, requiring more frequent harvesting of inventory and price information from back end data systems," the company explains on its website. "Your data system must be flexible and robust enough to dynamically mirror the fluctuating prices and inventory of brick-and-mortar stores, and evolve as new stores are added."
Wal-Mart signed up last summer for the online service and ended the relationship a short time later, according to the Wall Street Journal. Local Inventory Ads are a part of Google's broader AdWords offering and customers are not contractually obligated to it for a specific time period.
Representatives for the two companies met in February for further discussions and Wal-Mart, the report said, is looking to offer its own similar service and no longer wants to pay someone else to do it.
The retailer has invested billions in recent years to grow its online reach. Wal-Mart is expanding its online offerings to 10 million products and building out its fulfillment network as part of the investment.
Also included is money earmarked for e-commerce and upgrades to its website and mobile applications. During the Christmas shopping season Wal-Mart added a feature that allowed customers to download store-specific maps to help identify where products are located.
Wal-Mart is using its online tools to help drive customers into the stores, essentially the sort of product Google was offering.
"We've talked about the importance of investing in talent and the fact that we are building a technology company inside the world's largest retailer," Neil Ashe, president and CEO of Wal-Mart's global e-commerce, said Feb. 19 on a call with investors. "In the past year, we have been able to build up our team to the critical mass needed to be that technology company."
Because the lines between retail and tech are blurring more than they have before, it isn't odd that a relationship between major companies such as Wal-Mart and Google deteriorated in a matter of months, Spieckerman said.
"Alliances that made sense months ago can begin to seem superfluous or even perilous as it develops capabilities in-house and as it seeks to own as much of the customer relationship ecosystem as possible," Spieckerman said. "At the same time, platforms like Google are also continually evolving and aspiring. Google is doubling down on its determination to be more than just a search engine and retail is a big part of that vision. For Wal-Mart and Google, these escalating conflicts of interest can easily point to a parting of ways."
Business on 03/06/2015