Google Challenges Amazon With New Shopping Service
In a bid to compete with Amazon.com, Google has released its shopping platform in the U.S. The service was first announced in May, but was only tested in a few places including France, Forbes reported. Though the tech giant won’t be selling product directly, it will offer recommendations to users based on their search history and will back certain items with a “Google guarantee” in case users want to return items, their orders are late, or they’re having issues with refunds, according to the original announcement. According to Forbes, many companies that have partnered with Google in the past are featured on the platform, including Walmart, Costco and Target.
Total Retail's Take: While Google doesn't have plans to be a retailer, it does want to protect its leading position in search, which is being threatened by Amazon as more consumers go to the online marketplace to search for products directly, bypassing Google in the process. Furthermore, it's in the best interest of Amazon's top competitors, including Walmart and Target, to find partners that can help divert traffic — and potential sales — away from the e-commerce leader. This new service from Google offers retailers and brands a portal that brings together ads, local targeting and transactions in one place, helping them to better compete against Amazon.
Price Glomski, executive vice president at global digital marketing agency PMG, had this reaction to the news: "Google's ultimate objective to provide a one-stop-shop for the customer purchase journey, starting at product discovery to purchase event, sets it ahead of competition outside of Amazon due to its breadth of user activity. For Google, providing seamless means of delivery and guaranteeing client satisfaction are no easy task, but the work is worth it. Google's biggest challenge will come down to its lack of a mass distribution center, which makes Amazon the beast of a company it is today. There are many issues in the current state of store-based inventory signals available to Google, which is reliant on its retail clients to provide, that oftentimes leads to dissatisfied clients. Amazon, on the other hand, set up its business model to be fully self-reliant by having partners ultimately utilize their distribution services to participate in and benefit from the platform itself. It will be very interesting to see how the two varying strategies evolve over time."