July 21, 2014
Google won’t be satisfied until it worms its way into every facet of your life.
Not content with being the world’s most-used search engine or owning the No. 1 source for online video, it’s now pushing into an arena that’s long been dominated by another web giant, Amazon. That’s right: Google’s going all-in with e-commerce.
The company confirmed in early July that it will begin focusing its considerable muscle on promoting and growing Shopping Express, which debuted in 2013. The service allows people to browse goods from nearby stores and then order them online, with a one or two-day turnaround for delivery.
Why is Google pushing into retail? What will this mean for other e-commerce and retail sites, most notably Amazon? Read on to find out.
Why Google is Pushing Into Retail
There’s actually a very simple reason why Google has decided to push into the retail space, and it has nothing to do with wanting to help customers get easier access to goods online and everything to do with money.
Google is not happy that Amazon has become the go-to destination for product searches. In every other search category, Google is the dominant search engine, from queries on maps to restaurants to finding obscure information. But when someone wants to find a product and compare prices on it, they head not to Google but to Amazon.
This does not sit well with Google, because it’s losing out on potential ad dollars. Its advertising is based on search volume, and since its search volume is (relatively) low for products, it’s missing out on dollars. Hence the need to beef up its retail services in the hopes of getting more people to do product searches, which in turn will lead to more advertisers forking over money.
The best way to do this, Google figures, is to mimic Amazon and become a seller itself, ensuring that people will associate Google with shopping in the same way they associate Amazon. There’s a lot at stake here. The online ad tracking firm eMarketer predicts that consumer packaged goods companies will spend $4.2 billion on direct-response digital ads in 2014.
What Is Google Shopping Express?
Google Shopping Express launched last year in an effort to compete with Amazon and other digital retailers. It’s essentially a service for those who don’t have the time or inclination to run to a store that’s only a few miles away. Google becomes the middle man, dispatching delivery trucks to pick up the items from those businesses and deliver them.
The company has so far formed partnerships with a number of major retailers, including Walgreens, Toys R Us and Target. Of course, why wouldn’t you want to partner with Google? Retailers only stand to benefit from offering another way to get their items out.
The three most important things to understand about Google Shopping Express are:
- It has Google’s money muscle behind it; some reports claim the company will spend up to $500 million to push the service.
- Google plans to roll out a preferred shopping service, kind of like Amazon Prime, once it starts to catch on
- The company is pushing on grocery delivery first, an area where Amazon has put greater focus in recent months.
The Battle with Amazon
For Google, it’s not Amazon per se that’s the threat; the two are very different companies and Amazon is retail-based, not dependent on advertising. So Google’s battle to win e-tail share from Amazon is not personal, as it is for Google’s battles with spammers. This is all business.
To win the battle, Google needs to make some major inroads on mobile product searches. That is where the company is most vulnerable, especially since Amazon introduced an app a few years ago that allows people to not only look up and compare pricing on items they’re looking at in stores but also scan bar codes of the actual products to get information on them, such as Amazon user ratings.
Google also has been frustrated by Amazon’s refusal to buy product listing ads, which companies such as eBay and Zappos have invested in heavily. Instead, the site relies on people coming directly to it to do searches and the organic search results from Google.
The Future of E-Commerce?
Whether Google Shopping Express can make a dent in the online retail business remains to be seen. It’s unwise to underestimate Google. Even when a new idea seems to struggle, such as the Google+ social networking platform that was initially aimed at siphoning off users from Facebook, the company finds a way to tweak it and make it work. Google+ became not so much a Facebook competitor but a complement to it that businesses can use to help boost their search rankings.
Part of the problem with Google product searches has been the lack of immediacy. When you look up products and compare prices on Amazon, you can then click a button to buy the product. That has not been the case for Google. You have to either do a whole new Google search for the seller of the product or shift over to Amazon to make the purchase; it’s a lot easier to just start at the latter.
Google claims Shopping Express is simply providing a better service for its users, helping to cut out steps from the shopping process. Since people are so darn impatient these days when it comes to online anything, you’d best make the process as streamlined as possible if you want to keep them.
Google says its aim with Shopping Express is to eventually be able to deliver products within the same day as they are ordered. That would help it compete with Amazon, which offers quicker and quicker turnarounds, though the whole drone delivery thing remains far off in the future.
Hurting Other Sites
If Shopping Express takes off, and there’s every reason to believe it will based on Google’s track record with new projects, it will definitely hurt other e-commerce sites. Expect many of them to beat a path to Google’s door to partner, because if you can’t beat them, join them. To Google, however, the primary goal is simply getting greater product search share. Seems like a complicated way to go about it.
Adrienne Erin writes twice weekly for SiteProNews about online marketing strategies that help businesses like De Ramon Plastic Surgery Institute succeed. Follow @adrienneerin on Twitter to see more of her work or get in touch.