When you think of turning to the internet to purchase clothing, an item for your home, or the latest tech gadget, where is the first place you look? For many people, buying online means navigating to Amazon.com. Amazon has somewhere between 20 and 35% of the market share of all online retail purchases. It also owns several other big players in the e-commerce world, such as clothing retailer Zappos.com and Diapers.com. And while some have complained that Amazon’s reach is hurting small retailers online, it’s exponential growth over the past 10 years hasn’t stopped big box retailers such as Home Depot, Costco, and Macy’s from attaining huge online sales growth over the past year. Amazon may dominate the field, but there’s room for other large retailers to grow, too.
One thing that might change the dynamic of e-commerce very soon isn’t coming from an online retailer, but from a search engine giant. Google plans to include a “buy now” button in search results which will give searchers an opportunity to purchase items without visiting another site. When this will happen hasn’t been announced just yet, but Google itself has confirmed the addition. "There's going to be a buy button,” said Google's chief business officer Omid Kordestani. “It's going to be imminent." The implementation of a buy now button in Google is not really a surprise—Facebook and Twitter have added buy now buttons over the past few years.
So how will the Google Buy button work? Say for instance you search for “Gillette Razor Blades.” The search results may include the buy now button, which when clicked on, would lead the shopper to a Google transaction page where payment and shipping information could be entered. The whole process would take place within Google’s pages.
Does this mean that Google is becoming Amazon? The answer to that isn’t clear just yet. As of now, it is believed that the merchant will retain all of the customer information, but Google will facilitate in the delivery of that info. Google will simply use its algorithm to direct potential buyers to merchants selling that product. This is different than the Amazon model, where all transactions go directly through the retailer, even if they are eventually fulfilled by an independent seller partnered with Amazon. But in order for the buy now button in SERPs to ever eat into Amazon’s market share, Amazon’s loyal customers would have to change their shopping habits and begin to think of a Google search as the first place to look for a product.
Still, it could be troubling for some people to hear that the company that controls the vast amount of search engine traffic on the web now wants to get into the retail game. Google already has plenty of data on their users, which can be unsettling to some given the recent conversations about government snooping and data sharing. Civil liberties advocates may be predictably upset that such a huge data warehouse wants to now track our purchases, too. Further, retailers may be lukewarm to the idea of having Google act as a middleman between them and their customers. Retailers, especially large ones, spend a lot of money on customizing the shopping experience on their websites. Why should they forgo all of that effort to have Google act as the de facto retailer on their behalf?
But Google says they’re not interested in becoming a retailer, they only want to better assist their customers—advertisers—in connecting them with people who want to buy their products. The buy now button would be especially useful in courting customers using their mobile devices to shop, says VP of Google AdWords Jerry Dischler. Dischler says that Google doesn’t want to compete with retailers, but instead form a partnership that will help advertisers sell more of their products. Google has the information about searches that can help mobile users more easily find products online using mobile search ads. Currently the plans are to roll out the buy now button for mobile searches on Android devices initially. Google will decide later when and if they will add the feature to iOS devices.
Other experts in the field argue that this move is even more encouragement to favor mobile for selling. "With Google Buy set to only be available on mobile devices and the search giant recently changing its algorithm to favor mobile optimized sites, it is clear Google believes that smartphones and tablets are the way forward for e-commerce," said Kevin Dallas from Worldpay eCommerce. "This move from the world's biggest search engine might alarm some merchants but companies should see Google Buy as a positive, spurring retailers to acknowledge the benefits for consumers when they invest in making their site mobile optimized,” Dallas said. "Customers expect to be able to transact swiftly and safely from mobile devices and any company that hasn't done so will be swiftly outmaneuvered by more nimble competitors."
Some retailers may have already begun to seriously consider this kind of partnership with Google. According to the Wall Street Journal, anonymous sources have said that Macy’s is mulling the idea of joining Google for the launch of the buy now button. One big advantage of Google Buy for retailers both large and small is that Google will not collect a percentage on the transaction. Retailers will still of course pay per each click on the ad, which is the same model they have always used. This might be a tipping point for merchants that have not partnered with Amazon or eBay because they continue to take a bit of each transaction for themselves.
The sources from the Wall Street Journal article also said that Google is planning on offering retailers the chance to opt-in to marketing programs, which would allow the merchants to market to their customers the same way they would if the sale was happening on their own site, rather than Google’s landing page. Will that option be enough to convince retailers to trust Google as their virtual storefront greeter? Time will tell.
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