Saturday, April 17, 2021

Google aims to become the anti-Amazon of e-commerce. This is a long way to go.


Oakland, California – Google tried Amazon’s Playbook to become the Internet’s shopping hub, with little success. Now it is trying to do something different: anti-Amazon strategy.

Google is trying to present itself as a cheaper and less restrictive option for independent vendors. And it focuses on driving traffic to sellers’ sites, not selling their own version of their products, as Amazon does.

In the final year, Google eliminated the fees for merchants and allowed sellers to list their merchandise in their search results for free. It is also trying to make it easier for small, independent stores to upload their list of products to appear in search results and to buy ads by teaming up with Shopify on Google, an online store for 1.7 million merchants Empowers those who sell directly to consumers.

But like many of Google’s efforts during its two-decade search to compete with Amazon, it shows little signs of working. Google has nothing other than to be as attractive as the $ 295 billion that went through Amazon’s third-party market in 2020. The amount of goods Google buys is comparatively “very small” – probably $ 1 billion, according to marketplace Pulse founder Juozus Kaziunas. , A research company.

The Amazon is a fixture in the lives of many Americans. This has given rise to Google as a starting point for shoppers and has become equally essential for marketers. Amazon’s global advertising business Grew 30 percent to $ 17.6 billion In 2020, leaving only Google and Facebook behind in the United States.

But as the epidemic has forced many stores to go online, it has led to a new opening for Google to entice sellers who feel uneasy about building their business on Amazon.

Christina Stang, 33, opened Fritzie’s Roller Skate Shop Last March near Pacific Beach in San Diego. A Shelter-in-Place order forced her to set up an online storefront on Shopify.

He got lucky. She was sitting on a huge supply of skates when demand rose. Skating videos became popular on Tikkok during the epidemic.

He linked his Shopify account to Google’s retail software and started buying so-called smart shopping ads. Working within an allocated budget, Google’s algorithms dictate where to place ads and which products to offer. In 2020, it spent $ 1,800 on advertisements, clocked 3.6 million times and led to $ 247,000 in sales, she said.

She considered selling her products on Amazon’s market, but she worried about what Amazon’s fees would mean for her already slim profit margins. She also likes that Google redirects them to a carefully curated website instead of placing them inside its store, as Amazon does.

“I could sell on Amazon and not make any real money, but there was a huge online presence,” Ms Stang said. “It didn’t seem like a great idea.”

Recently, however, it has experienced one of the drawbacks of being stuck in a partnership between Google and Shopify. Her store has been unable to list any products since January as Google suspended her account. It stated that its shipping costs appeared more expensive on Google than their Shopify-powered website, even though they were no different.

Shopify told him that it was a Google issue. Google’s customer service representatives recommended that they hire a web designer. She continues to manage without Google, but it has provided her with a largely positive experience.

“It has completely bitten me on my knees,” he said. “I’m a small business, and I don’t have hundreds or thousands of dollars to solve it.”

Sellers often complain about Amazon fees, which may account for a quarter of every sale, not the cost of advertising and Over spending pressure For success. Merchants on Amazon do not have a direct relationship with their customers, limiting their ability to communicate with them and generate future business. And because everything is contained within the world of Amazon, it is difficult to get a unique look and feel that the identity of a brand is the way companies can express themselves on their websites.

But since 2002, when it started a price comparison site called Froogle, a misleading play on the word “Frugal” that required a rebranding after five years, Google has created a unified vision chart for the shopping experience Have struggled for

It tried to challenge Amazon directly Operating same day delivery service, But it called off the project, as the costs ballooned. It tried to partner with traditional retail giants, only seeing the alliances overcome the lack of sales. It created its own marketplace, making it easier for shoppers to buy the things they found on Google, but consumers were not able to break from their Amazon habit.

Last year, Google brought in Bill Ready, a former chief operating officer at PayPal, to fill a new senior position and a large part of its buying strategy.

During his hiring, Google CEO Sundar Pichai warned senior executives that the new approach could mean a short-term critique in advertising revenue, according to two people familiar with the conversation who requested anonymity because they were allowed Did not discuss them publicly. He asked the teams to support the e-commerce push as it was a priority of the company.

When the epidemic created a huge demand for online shopping, Google has abolished the feesRetailers are allowed to list products for free and withdraw the 2012 decision only to allow advertisers to display the goods on their shopping site.

Three months after hiring Mr. Ready, Google said Free listings will be shown On its main search results. Then google said Customers can buy products directly There are no commissions from merchants on Google. It also said that Google will open its platform to third parties such as Shopify and PayPal so that vendors can continue to use their existing tools to manage inventory and orders and process payments.

The partnership with Shopify was particularly meaningful as hundreds of thousands of small businesses have Come on the software platform During the epidemic. According to research firm eMarketer, about 9 percent of online shopping sales in the US occurred at Storefronts operated by Shopify. This was up from 6 percent the prior year and only Amazon had a share of 37 percent.

Shopify’s president, Harley Finkelstein, said that Google and Shopify were developing new ways for merchants to sell through Google services, such as experimenting with customers buying items directly on YouTube and what product stores are taking to Google Maps, To demonstrate this.

Mr. Ready followed a fine line on Amazon, a big buyer of ads on Google, but made it clear that Amazon’s dominance in e-commerce posed a threat to other merchants.

In an interview, he said, “Nobody wants to live in a world where there is only one place to buy something and retailers don’t want to depend on gatekeepers.”

Google said that it has increased the number of vendors to be displayed in its results by 80 percent in 2020, with the most significant growth coming from small and mids businesses. And existing retailers are listing more products.

Overstock.com, a seller of discount furniture and home beds, said it had paid to list products on Google in the past. But now listings are free, with Overstock also adding low-margin products.

Jonathan E. Johnson, Overstock’s chief executive, said, “When all the purchases on Amazon start and go bad for the industry,”. “It is good to have another 800-pound technical gorilla in this place.”

It is unclear whether the number of merchants is increasing and listings on Google will eventually change online shopping habits.

bactrackA manufacturer of breathalysers has more than doubled its advertising spend on Amazon in the past two years because of where customers are, she said, while she has spent 6 percent less on advertising her products on Google.

“It seems that more and more people are leaving Google and going straight to Amazon,” said BACtrack chief executive Keith Nothker.



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