Vendor view: why new-look retail tech partnerships are emerging
The Microsoft-Walmart technology deal announced on 17 July is one of a new breed of retail tech partnerships emerging across the industry.
Much of the five-year contract agreed by the US’s largest grocer and one of the country’s most prominent tech houses revolves around cloud-based services and artificial intelligence (AI) development, but the deal – like others announced recently – has a different flavour to retail tech partnerships of the past.
Like the recently-announced Microsoft contract with Marks & Spencer (M&S) in the UK, and French grocer Carrefour’s collaboration with Google Cloud, there is something much more strategic and over-arching than the traditional tech supplier partnerships the industry is used to.
Retail Connections sought the views of those operating in the industry, to understand what’s at play here. Is it the start of different retail tech partnerships between supplier and retailer? Are they only reserved to the retail giants due to cost and scale? And what’s fuelling it all?
In each recent case – M&S, Carrefour and, now, Walmart – there’s a lot of focus on the alliance of the tech company with the retailer’s in-house data scientists to drive innovation and what each party will hope becomes digital transformation within those businesses.
For example, the respective engineers at Walmart and Microsoft are set to team up to assess, develop, and support the moving of hundreds of the grocer’s existing applications to cloud native architectures. Much of Walmart.com and Samsclub.com will migrate to Azure, in a move that is expected to have customer-facing benefits at the online checkout.
Lee Gill, global head of retail strategy at JDA Software, says this is an example of one of three clear retail technology models emerging today. It is an example of a pattern where companies like Microsoft and Google offer “cloud native, truly software-as-a-service” products which provide little disruption to an organisation when implemented.
He argues there are traditional industry specific tech vendors, like JDA, which are looking to invest in companies that bring with them AI and machine learning capability, and there are the new-wave tech platforms such as Alibaba, Amazon, JD.com and Ocado that are retailers by trade but with advanced technology they can sell to others in the space.
“We’ve got a real mix going on,” he notes. “In the next five years, the top retailers in the world will be technology companies.”