John W HayesGoogle is rumored to be entering the world of eCommerce with the imminent launch of a “Buy” button on its mobile search results pages. It’s a move, many pundits believe, is designed to grab marketshare of the search market from online retail giants like Amazon.
You might not think of Amazon as much of a threat to a search engine like Google, but consider this:
While Google has pretty much sewn up the generic search market (information, news, etc.), it is a long way from owning product related searches. I myself nearly always start product related searches on Amazon, knowing that if those guys don’t sell it, it probably doesn’t exist.
Hitting Amazon Where it Hurts
In recent years, Amazon has built a highly lucrative “marketplace” business, allowing third party retailers to sell their products via Amazon’s highly trafficked, global, retail site. The marketplace business has enabled retailers of all shapes and sizes to shift more products and drive significant revenues.
But Amazon’s service does have its limitations:
- It’s Expensive: Amazon is an acquisition-marketing channel. Every time you make a sale on Amazon (even if it is to a repeat customer) retailers will pay those expensive acquisition-marketing rates. These fees can severely damage a retailer’s margins if they are not kept in check.
- No Ownership: Third party retailers do not own the relationship with customers won on Amazon. This means they are unable to re-market to clients they have shipped products to, meaning there is little opportunity to win repeat business via low cost marketing strategies like email marketing.
A Google-run service will have a number of advantages:
- Clicks: It will reduce the number clicks between the initial search and purchase making the shopping experience more streamlined and efficient.
- Payment Details: Credit card details will be stored in a secure, central environment, meaning shoppers do not have to enter payment details each time they visit a new retailer.
- Mobile Friendly: The product is designed for the mobile environment, allowing easy entry into a highly lucrative market. THIS SHOULD NOT BE SEEN AS AN EXCUSE TO DELAY ANY INVESTMENT INTO OPTIMIZING YOUR WEBSITE FOR THE MOBILE ENVIRONMENT!
The Same But Different
Media reports suggest that Google’s move into the world of online retail will look pretty similar to other marketplaces such as Amazon and eBay. Shoppers will be directed to a Google branded page where they can select item specifics like size, color, etc., before entering payment and shipping details. Retailers will receive instructions regarding shipping and the payment will come from Google (not the consumer).
Unlike Amazon, Google will charge retailers upfront on a pay-per-click basis, similar to their existing advertising and comparison shopping platforms.
The Opportunity to Opt-In
However, the main difference between the new platform and existing marketplace business will be that Google is reportedly offering online shoppers the opportunity to opt-in to marketing programs offered by retailers (as they would if they visited the retailer’s site directly). This gives the retailer the opportunity to effectively own the relationship with their customers and re-market to them, bypassing the marketplace and their listing or final value fees.
The question remains how many people will opt-in to receive email marketing communications and if retailers will be given the opportunity to promote the benefits of subscription – but at least the opportunity to own the relationship is there.
Will you sell your products directly on Google? Share your comments below:
This post first appeared on the iContact Email Marketing Blog.
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