It’s hardly unrealistic to say that Amazon is the Google of online retail. Both had a decisive role in shaping our current digital landscape during a time when it was still in its relative infancy, becoming virtually synonymous with it as a result. And both have expanded into digital as well as physical market segments that would have been unthinkable even fifteen years ago.
And both suffer from consumer criticism. While a recent survey from Convey found that four out of every ten American consumers purchase the majority of their goods on Amazon, 41 percent viewed supporting small businesses as critical in 2021. But while Amazon has never been anything but friendly towards independent merchants, visibility can sometimes be minimized when customer demand is driven more by name recognition and price point advantages than innovation. Can Google’s recent eCommerce expansion help fill that gap?
Google’s eCommerce Push: Too Late or Too Soon?
While Google may have developed its Shopping platform almost twenty years ago, it’s been primarily dominated by brand names and retailers which could afford their rates for paid searches. And while Google ads remain a significant driver for new product discoveries, they’re not always the most cost effective means for many emerging brands.
That changed last year, when Google announced plans to accommodate retailers during the pandemic by making listings on Shopping free for merchants, with results being driven by Google’s algorithm instead of paid advertising placements. At the time, it was widely considered to be an enticement for the commission-free Buy on Google marketplace—a marketplace which reportedly saw a 74 percent year over year growth in the number of products listed and an 80 percent increase in merchants as a result.
No one is likely to offset Google’s dominance as the world’s largest search engine. And their recent launch of Buy on Google may provide a competitive one-stop eCommerce channel in a market all but monopolized by Amazon. But when it comes to product specific consumer searches, Google still lags considerably behind. A survey from Dynata conducted in 2020 found that traditional search engines accounted for only 23 percent of searches for product discoveries, while the lion’s share has historically belonged to Amazon. Nor is product searches the only area where Google is falling behind. While Google still commanded an impressive $39.5 Billion in US digital advertising revenue during 2020, that figure actually fell by over 5 percent from the previous year as competitive ad channels saw a sharp uptake in growth. Not least of which was Amazon, which saw a 47 percent growth rate last year—a segment growing faster than both Amazon’s retail and web services.
Google and the Shopify Effect: A Mixed Blessing?
Earlier in May, Google announced their official partnership with Shopify in a highly publicized strategy that was heralded by some analysts as a “pivotal masterstroke” for the search giant and resulted in a 5 percent increase in stocks for Shopify. And from the outset, it’s hardly an exaggeration. Not only will the strengthened integration with Google allow Shopify’s 1.7 million merchants increased visibility across both Google’s app suites as well as YouTube, it will also help bolster Google as a competitive channel in a digital ecosystem by and large dominated by Amazon. But despite the strength of Google’s name alone, Shopify is not without criticism. While Google might claim their partnership will ultimately benefit smaller sellers, a surprisingly large percentage of Shopify storefronts are owned and operated by industry leaders including PepsiCo, Tesla and Hasbro. And it’s not easily predictable whether or not recent partnerships with Facebook Shops and Walmart will be likely to result in an advantage for either, despite Shopify’s quip that they are “arming the rebels” against Amazon. Nor will Shopify’s name necessarily drive Google’s eCommerce push; as early as 2017, Shopify was already being referred to by some digital analysts as a “get rich quick” scheme enabling fraud, deceit and trademark violations just two years after the platform solution went public.
Google’s Ongoing Investment in eCommerce
Commission-free marketplaces and partnerships with the likes of Spotify aren’t the only new developments Google has planned for eCommerce. Key developments include a newly launched Shopping Graph, a real-time dataset of brands, merchants, reviews, product information and inventory data for consumers connecting to some 24 billion listings, as well as shoppable YouTube clips from creators and shoppable screenshots of products viewed in Google Photos.
But with third party sellers on Amazon alone contributing an estimated $295 Billion to digital commerce’s 14 percent share of retail in the US, Google’s eCommerce push is less a question of strategy but one of necessity. While Google has all but ignored their retail commerce efforts to focus on product development and advertising, to ignore the fundamental shifts in trade and communications eCommerce has instigated as a result of the past eighteen months would be a disaster for any entity—even one the size of Google. But it’s not about competition. It’s about coexistence. And at the heart of their eCommerce expansion is the same drive that prompted billions of users to adopt Google as a search engine in the first place some twenty three years ago: freedom of choice.
Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more at Color More Lines.