OAKLAND, Calif. – Google tried to copy the Amazon manual to become the center of Internet shopping, with little success. Now he is trying something different: the anti-Amazon strategy.
Google is trying to present itself as a cheaper and less restrictive option for independent sellers. And it’s focused on driving traffic to vendor sites, not selling its own version of products, as Amazon does.
Last year, Google eliminated fees for merchants and allowed sellers to list their products in search results for free. He is also trying to make it easier for small independent stores to upload their stock of products to appear in search results and buy ads on Google in partnership with Shopify, which provides online stores to 1.7 million merchants who sell directly to consumers.
But, like Google’s many attempts during its two-decade search to compete with Amazon, it shows little sign of working. Google has nothing quite as attractive as the $ 295 billion that went through Amazon’s third-party market in 2020. The amount of goods that people buy on Google is “very small” in comparison – probably around $ 1 billion, said Juozas Kaziukenas, founder of Marketplace Pulse, a research firm.
Amazon is a constant element in the lives of many Americans. It usurped Google as a starting point for buyers and became equally essential for marketers. Amazon’s global advertising business grew 30% to $ 17.6 billion in 2020, second only to Google and Facebook in the United States.
But as the pandemic forced many stores to go online, it created a new opportunity for Google to attract sellers who feel uncomfortable building their businesses on Amazon.
Christina Stang, 33, opened Fritzy’s Roller Skate Shop near Pacific Beach in San Diego last March. On-site shelter orders forced her to open an online store on Shopify.
She was lucky. She was riding on a huge supply of skates when demand increased, as skating videos became popular on TikTok during the pandemic.
She linked her Shopify account to Google’s retail software and started buying so-called smart shopping ads. Working within an assigned budget, Google’s algorithms choose where to place ads and which products to present. In 2020, she spent $ 1,800 on ads, which were viewed 3.6 million times and generated $ 247,000 in sales, she said.
She considered selling her products on the Amazon market, but worried about what Amazon’s fees would mean for her already narrow profit margins. She also liked the fact that Google redirected people to their carefully selected website, rather than keeping them inside their own store, as Amazon does.
“I could sell on Amazon and not make real money, but have a bigger online presence,” said Stang. “It didn’t seem like a good idea.”
Recently, however, she experienced one of the disadvantages of being stuck in the middle of a partnership between Google and Shopify. Your store has been unable to list any products since January because Google has suspended your account. He said that his shipping costs seemed more expensive on Google than on his website with Shopify, although they were no different.
Shopify told her it was a Google problem. Google’s customer service representatives recommended that she hire a web designer. She continues to manage without Google, but that has detracted from her largely positive experience.
“It completely cut my knees,” she said. “I am a small business and I don’t have hundreds or thousands of dollars to resolve this.”
Sellers often complain about Amazon’s fees, which can account for a quarter of each sale, not including the cost of advertising, and the pressure to spend more to succeed. Amazon merchants do not have a direct relationship with their customers, limiting their ability to communicate with them and generate future business. And as everything is contained in the Amazonian world, it is more difficult to create a unique look and feel that expresses the identity of a brand in the way that companies do on their own websites.
But since 2002, when he started a price comparison site called Froogle, a confusing game with the word “frugal” that required a brand overhaul five years later, Google has been struggling to draw a cohesive vision for its shopping experience.
He tried to challenge Amazon directly, testing his own same-day delivery service, but closed the project as costs increased. He tried to form partnerships with traditional retail giants, only to see the alliances wither due to lack of sales. He built his own market to make it easier for buyers to buy what they find on Google, but he was unable to lift consumers out of their Amazonian habit.
Last year, Google brought in Bill Ready, a former PayPal chief operating officer, to fill a new senior position and lead a review of its purchasing strategy.
At the time of his hiring, Sundar Pichai, Google’s chief executive, warned senior executives that the new approach could mean a short-term reduction in advertising revenue, according to two people familiar with the conversations, who asked not to be named because they did not. they were allowed to discuss them publicly. He asked the teams to support the push for e-commerce because it was a company priority.
When the pandemic generated a huge demand for online shopping, Google eliminated the fees, allowing retailers to list products for free and returning to the 2012 decision to allow only advertisers to display products on their shopping website.
Three months after hiring Ready, Google said that free listings would appear in its top search results. Then, Google said customers could buy products directly from merchants on Google, with no commissions. He also said that Google would open its platform to third parties, such as Shopify and PayPal, so that sellers could continue to use their existing tools to manage inventory and orders and process payments.
The partnership with Shopify was especially significant because hundreds of thousands of small businesses migrated to the software platform during the pandemic. About 9 percent of online shopping sales in the United States took place in storefronts powered by Shopify as of October, according to research firm eMarketer. That was 6% higher than the previous year and second only to Amazon’s 37% share.
Harley Finkelstein, president of Shopify, said that Google and Shopify are developing new ways for merchants to sell through Google services, such as experiments to allow customers to buy items directly on YouTube and display what products stores are selling on Google Maps.
Ready walked a fine line when it came to Amazon, which is a major ad buyer on Google, but made it clear that he believed Amazon’s dominance in e-commerce posed a threat to other merchants.
“Nobody wants to live in a world where there is only one place to buy something and retailers don’t want to depend on guardians,” he said in an interview.
Google said it increased the number of sellers appearing in its results by 80 percent in 2020, with the most significant growth coming from small and medium-sized businesses. And existing retailers are listing more products.
Overstock.com, a discount furniture and bedding seller, said it has paid to list products on Google in the past. But now that the listings are free, Overstock is adding low-margin products as well.
“When all purchases start and stop at Amazon, this is bad for the industry,” said Jonathan E. Johnson, chief executive of Overstock. “It’s good to have another 800-pound tech gorilla in this space.”
What is still unclear is whether the increase in the number of merchants and listings on Google will ultimately change online shopping habits.
BACtrack, a maker of breathalyzers, has more than doubled its advertising spend on Amazon in the past two years because that’s where customers are, she said, although it spent 6% less advertising its products on Google.
“It seems that more and more people are moving away from Google and going straight to Amazon,” said Keith Nothacker, chief executive of BACtrack.