OAKLAND, California – Google tried to copy Amazon’s playbook to become the hub 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 sellers’ sites, not selling your own version of products, like Amazon does.
In the last year, Google removed fees for merchants and allowed sellers to list their products in their search results for free. It’s also trying to make it easier for small, independent stores to upload their product inventory to appear in search results and buy ads on Google by partnering with Shopify, which powers online stores for 1.7 million merchants who sell directly to customers. consumers.
But like Google’s many attempts during its two-decade quest to compete with Amazon, this one shows little sign of working. Google doesn’t have anything as attractive as the $ 295 billion that went through Amazon’s third-party market in 2020. The amount of goods people buy from Google is “very small” in comparison, probably around $ 1 billion, said Juozas Kaziukenas, founder of Marketplace Pulse. , a research company.
Amazon is a fixture in the lives of many Americans. It has usurped Google as a starting point for shoppers and has become equally essential for marketers. Amazon’s global advertising business grew 30 percent to $ 17.6 billion in 2020, behind only Google and Facebook in the United States.
But as the pandemic has forced many stores to go online, it has created a new opportunity for Google to woo sellers who are uncomfortable building their businesses on Amazon.
Christina Stang, 33, opened Fritzy’s Roller Skate Shop near Pacific Beach in San Diego last March. Shelter-in-place orders forced her to set up an online store on Shopify.
Was lucky. She was sitting on a slew of skates when demand spiked when skating videos became popular on TikTok during the pandemic.
He linked his Shopify account to Google’s retail software and started shopping for so-called smart shopping ads. Working within an allotted budget, Google’s algorithms choose where to place the ads and which products to present. In 2020, he spent $ 1,800 on the ads, which were viewed 3.6 million times and generated $ 247,000 in sales, he said.
He considered selling his products on the Amazon marketplace, but was concerned about what Amazon’s fees would mean for his already slim profit margins. He also liked that Google redirected people to its carefully selected website instead of keeping them within its own store, as Amazon does.
“You could sell on Amazon and not make real money, but have a greater online presence,” Stang said. “It didn’t seem like a great idea.”
Recently, however, you’ve experienced one of the downsides of being caught in the middle of the Google and Shopify partnership. Your store hasn’t been able to list any products since January because Google suspended your account. He said his shipping costs seemed more expensive on Google than on his Shopify-powered website, although they were no different.
Shopify told him it was a Google problem. Google customer service representatives recommended that he hire a web designer. She continues to run without Google, but it has tainted her experience largely positive.
“This has completely cut off my knees,” he said. “I am a small business and I don’t have hundreds or thousands of dollars to figure this out.”
Sellers often complain about Amazon fees, which can account for a quarter of every sale, not including the cost of advertising and the pressure to spend more to be successful. Amazon merchants do not have a direct relationship with their customers, which limits their ability to communicate with them and generate future business. And because everything is contained in the world of Amazon, it is more difficult to create a unique look that expresses the identity of a brand in the way that companies can do on their own websites.
But since 2002, when it started a price comparison site called Froogle, a confusing play on the word “frugal” that required a rebrand five years later, Google has struggled to map out a coherent vision for its shopping experience.
It tried to challenge Amazon outright by piloting its own same-day delivery service, but shut down the project as costs skyrocketed. He tried to forge partnerships with traditional retail giants, only to see the alliances weaken from a lack of sales. He created his own marketplace to make it easier for shoppers to buy things they find on Google, but he couldn’t shake consumers out of his Amazon habit.
Last year, Google hired Bill Ready, a former PayPal COO, to fill a new senior role and lead a review of its purchasing strategy.
Around the time of his hire, Sundar Pichai, Google’s chief executive, warned senior executives that the new approach could mean a short-term squeeze on ad revenue, according to two people familiar with the conversations, who requested anonymity because they did not. they were allowed to do so. discuss them publicly. He asked teams to support the push for e-commerce because it was a company priority.
When the pandemic spurred high demand for online shopping, Google removed fees, allowing retailers to list products for free and rolled back a 2012 decision to allow only advertisers to display products on its shopping site.
Three months after hiring Mr. Ready, Google said the free listings would appear in its top search results. Then Google said that customers could buy products directly from merchants on Google with no commission. He also said that Google would open up 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 have flocked to the software platform during the pandemic. About 9 percent of US online shopping sales were made in stores powered by Shopify in October, according to research firm eMarketer. That was a 6 percent increase from the previous year and only surpassed by Amazon’s 37 percent share.
Harley Finkelstein, president of Shopify, said Google and Shopify were developing new ways for merchants to sell through Google services, such as experiments to let customers buy items directly on YouTube and show what products the stores have on Google. Maps.
Ready walked a fine line when it came to Amazon, which is a big 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 gatekeepers,” he said in an interview.
Google said it had 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 seller of discount furniture and home bedding, said it had paid to list products on Google in the past. But now that the listings are free, Overstock is also adding low-margin products.
“When all purchases start and end at Amazon, that’s bad for the industry,” said Jonathan E. Johnson, CEO of Overstock. “It’s nice to have another 800-pound tech gorilla in this space.”
What’s unclear is whether increasing the number of merchants and listings on Google will ultimately change online shopping habits.
BACtrack, a manufacturer of breathalyzers, has more than doubled its advertising spend on Amazon in the past two years because that’s where customers are, he said, while spending 6 percent less to advertise its products on Google.
“It seems that more and more people are skipping Google and going straight to Amazon,” said Keith Nothacker, CEO of BACtrack.