Google Just Ups Its Ecommerce Ante Against Amazon. Will It Work? – Forbes - Freelance Rack

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Thursday, July 23, 2020

Google Just Ups Its Ecommerce Ante Against Amazon. Will It Work? – Forbes

As coronavirus has sent more shoppers buying online, Google GOOGL , after several failed attempts in the past, is taking yet another swipe at industry giant Amazon AMZN in a bid to have a growing share of the ecommerce pie. The question is, will it work this time? 

Google said Thursday it will drop the commission fee for merchants that participate in its Buy on Google program that allows consumers to search and check out products directly on its platform without having to be directed to retailers’ pages to buy. Google said it’s also opening its platform to third-party providers, starting with PayPal PYPL and Shopify, to give retailers more choices.

The search-engine giant also has made it free for retailers to list products on Google Shopping in the U.S., on top of bringing those free listings to Google Search.  

While all these sweetened deals may well help Google attract more sellers, that is very different from Google actually having a run on Amazon’s bread-and-butter business in any way. 

Why? Try finding some products on Google Shopping and filter for products under Buy on Google and you can see for yourself. The process is confusing and far from nailing the basic consumer demand for that seamless experience. When I randomly picked three items, each under $25, from three different sellers including Target TGT for a total of $54, the shipping fee that each merchant would have charged at checkout amounted to an additional $19. (Google said on the website the per-store free-shipping purchase minimum is $25 or $35 for most retailers.)

These potential deliveries, a light resistance band, a pair of 2-pound dumbbell set, and a dress, would have arrived separately on July 30, Aug. 13 and July 28 instead. 

As the world’s top search engine, Google’s clout and its attempt to stop Amazon from having a growing share of its ad market, is not to be overlooked, but the tech giant’s latest move so far has failed to show any real promise of posing any real threat to Amazon on the ecommerce front.

Many studies show consumers begin their product search on Amazon for a good reason. The online retail giant has been able to hook them with easy one-basket shopping experience. Similar-priced items I had found on Google Shopping could have easily qualified for free shipping via Amazon as the total transaction topped $25, its free-shipping minimum.

That’s not to mention Amazon has hooked most of its Prime members with perks including Prime video and two-day, and increasingly one-day shipping, and the ability to bundle shipments together for consumers who want to minimize packaging and delivery waste.

Amazon Prime AMZN had 112 million members in the U.S. as of Dec. 31, respresenting about two-thirds of its shoppers, according to a report from Consumer Intelligence Research Partners in January. 

The company has about 34.5% share of the U.S. ecommerce market, up 1 percentage point from last year, Morgan Stanley MS analyst Brian Nowak estimated in a report last week. He forecast Amazon’s share will rise to 37% by next year. 

Walmart WMT , meanwhile, will beat eBay EBAY to become No. 2 online U.S. seller this year with a 5% share of the market, outpacing eBay’s 4%. Etsy, Wayfair W and Chewy will have 1% each, the analyst projected. 

Google’s share, meanwhile, is almost nonexistent in any of these types of forecasts.

By sellers, Amazon had three million active sellers in 2019, including more than 1.1 million in the U.S., according to a study by ecommerce analytics firm Marketplace Pulse. More than 85% of Amazon’s top sellers in the US offer Prime shipping through its Fulfilled by Amazon logistics network for more than half of their assortment last year, up from 56% three years earlier, the study finds. 

In contrast, Walmart, which has picked up online sales partly with its increased offers of grocery curbside pickup and delivery, added 13,000 marketplace sellers last year alone to more than 35,000, according to Marketplace Pulse. 

As to Google? It closed 2019 with more than 3,700 participating stores and sellers including third-party merchants that also sell on Amazon and major chains including Target and Best Buy BBY , up from 825 in 2018, the study finds.

“While other major retailers are scrambling to offer one-day shipping, the new industry ‘standard’ set by Amazon, Google Shopping fails short,” the Marketplace Pulse report noted, adding most products on Google show week-long delivery times. “Not only does Google have to figure out how to make “I bought it on Google” a household phrase, but it also needs a strategy for fast shipping….The convenience of next-day delivery is what brings shoppers to Amazon and Walmart.”

And any delay caused by Covid-19 won’t be good enough reason if Google wants to be reckoned as a serious ecommerce player.

Related on Forbes: Best Buy sales rebound after stores reopen, another sign coronavirus won’t kill brick-and-mortar retail

Related on Forbes: Can coronavirus help rev up Harley-Davidson HOG?



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