Why Google Cloud wants in offline stores

Last April, Google announced the launch of Google Cloud for Retail that is aimed to support retailers, both online and offline, with personalized recommendations, real-time inventory management, and in-store customer assistance. During the last Google Cloud Summit in Chicago, they ran a complete parallel session devoted to retailers.

It is one of the company’s first efforts to capture a whole vertical with a single-stack growth model, but it seems like their marketing is a bit ahead of their products.

Interestingly, most of the presenters at the retail breakout during Cloud Summit were Google’s partners, such as Trax, Toolip, and Sensormatic. While they provided a great overview of their products and services, a single question arouses: what Google itself has to offer to the retail industry? As it turns out, not that much.

The affiliation of Google and partnering vendors is happening merely through the vendors using Google Cloud. The list of Google’s solutions for retail is rather short, limited to the products we all know outside of the new retail division.

One would expect an announcement of a new inventory management tool from Google or something along those lines. But Google took a shortcut by leveraging existing solutions from partners instead. So why would Google bother connecting vendors with retailers, if they do not have any products to offer?

They want the data.

Most surely, Google Cloud has more comprehensive retailer-oriented products coming up in the next couple of years. The reason their marketing is ahead of their products is the race with another well-known digital commerce platform.

Amazon and Google clashed over cloud computing, intelligent assistants, and now online shopping. After Amazon took over the product searches, most of the shopper journeys now start from their website and Google loses its most valuable asset — data.

We see Google’s attempts to bring control over shoppers' behavior with products like Shopping List and Google Express. It also explains the rush to onboard new partners and clients on Google Cloud for Retail prior to having a strong value proposition.

Nevertheless, Bed Bath and Beyond, Carrefour, IKEA, Kohl’s and Target are already on-board. Smaller retailers come next, and Google is not limiting itself to the online. Since over 90% of transactions still happen offline, they recognize the need to get themselves into the brick and mortar stores, as the possession of that data leads to complete market domination.

Because they have massive amounts of data on what and how we buy, and the ability to manipulate it, the megapowers threaten to overwhelm the competition. — Howard Tullman

The retail industry is digitalizing faster than anyone has predicted, and the race to take over the shopping data will define the gatekeepers of the new economy.