Google’s new retail strategy is a clever way to cut into Amazon’s business that also solves its image problem (GOOG, GOOGL, AMZN)

Google signed a deal with Carrefour that enables customers of the French supermarket chain to order goods online or via Google Assistant
More traditional retailers around the world are turning to Google for help as they look for help in competing against retailing juggernaut Amazon.
Analysts say that this represents numerous opportunities for Google.

For Google CEO Sundar Pichai, venturing into the international retail sector presents all sorts of of opportunities. Not the least of which is the ability to challenge rival Amazon in the retailer’s bread-and-butter business and to cast itself as the anti-Amazon.

This week Google announced that it would enter the grocery business in France. The search and advertising magnet has partnered with Carrefour, one of France’s largest supermarket chains. Starting next year, Carrefour shoppers can order groceries by logging on to a Google-built shopping website that has yet to debut or via their Google voice assistant.

Customers can choose whether to have the goods delivered to their homes or to swing by and pick them up. Also part of the agreement is this sweet little nugget for Google: more than 160,000 Carrefour employees will work with Google Cloud's G Suit tools, including Hangouts, Gmail and Google Drive, according to Forbes. Google is working on competing for cloud contracts against, you guessed it, Amazon Web Services.

The Carrefour deal signals that Google’s retail ambitions extend beyond the US, but it also hints at a new strategy that could help Google expand its footprint in hostile territory.

While government officials and businesses in France have a penchant for criticizing Google's vast market powers, the internet giant's potential to serve as counterforce to Amazon gives it a powerful selling point.

The enemy of an enemy makes Google a friend

Google's latest move comes after Amazon expanded its grocery offering in France in March as part of a deal with Monoprix, another big French grocery chain. Amazon said then that as part of the agreement, goods from Monoprix’s Paris stores only would be available on the Amazon Prime Now app and website. The companies suggested the offering could be expanded someday beyond Paris.

Amazon’s foray into Europe set off alarm bells among retailers on the continent. Worldwide, the Amazon threat has prompted traditional stores to rush into the arms of Google.

Indeed, the "national champions" in industries like retail and automobiles are a source of special pride throughout the old world. Whatever threat Google poses, it's banking on the fact that Amazon, in retail at least, will be perceived by the locals as an even greater threat.

A big boost to Google's collection of products and devices

Google Home Strategic calculations aside, it's easy to see why Google CEO Pichai is so hot on retail.

Not only do retail partners often pay Google to share the company’s digital expertise, but the alliances enable the company to raise the profile of Google’s digital valet and smart devices as well as the company’s cloud services.

The Carrefour deal will strengthen "Google’s ecosystem on Assistant, Connected Devices such as Home, and on its site,” Youssef Squali, a senior analyst at SunTrust Robinson Humphrey wrote Friday. “We believe this is a continuation of a trend we’ve seen domestically where Google partners with offline retailers to bulk up their ecommerce offerings.”

In the United States, Google launched a program in March enabling retailers, such as Target and Walmart and Costco to list their products on Google Search and Google Express shopping service, as well as on Google Assistant via mobile phones and voice devices.

In exchange for listing their goods, Google took a cut of each purchase This is additional to the money that Google charges to advertise on Google search and other platforms. The idea is to help traditional retailers become more competitive with Amazon by improving their ability to reach shoppers on their computers and handheld devices.

Guru Hariharan, CEO of retail technology firm Boomerang Commerce, said in an interview with Reuters, “Brands are looking at Google as the enemy of the enemy and that makes Google their friend.”

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