What Google Shopping Means for Online Retailers and Amazon
With Google's search engine market share hovering near 70 percent, it comes as no surprise that the search giant plans to revamp its current e-commerce function to further wedge itself into the online shopping industry. Google has already started transitioning the old Google Product Search to the new Google Shopping, a commercial e-commerce marketplace allowing participating merchants to sell their products directly to consumers.
Details about Google's new platform have leaked over the summer, leading to plenty of speculation about what this move means for online retailers. With inevitable changes on the way, it's crucial for online merchants to understand how Google can drastically alter the e-commerce world and, more importantly, how to prepare for these changes.
What's Google Shopping?
Unlike Google Product Search, Google Shopping requires merchants to buy product listing ads in order to sell on the site. This has created a major uproar across the industry. Google defends its case by explaining that a paid model will guarantee up-to-date product listings, and thus an improved shopping experience for online consumers, who are expected to spend $327 billion annually in the U.S. alone by 2016.
Google's new product listing ads serve as information-rich pay-per-click ads, offering detailed product information, current pricing and photos. Whether a retailer's listing pops up in search results or not depends on the item's relevance to the user's search, combined with the bid price. The most relevant products will be displayed with the associated image and information based upon a shopper's query. Shoppers will also be able to use special filters to tailor results to fit their preferences — e.g., if they're after free shipping or a specific brand.
Is Google Shopping the Next Amazon?
As Google takes the e-commerce plunge, it's impossible not to wonder what this means for Amazon.com. After successfully taking on the smartphone powerhouse Apple, it's easy to say that Google is one of the top, if not the contender to take on the online marketplace leader.