ECONOMY

Google, Shopify Extend Ties in Commerce Blitz Against Amazon

Google is pushing further into e-commerce with new tools and partnerships with Shopify Inc., Square Inc. and others to gin up more shopping on the search giant’s web properties — and very much not on Amazon.com Inc.

Alphabet Inc.’s Google announced Thursday that merchants using Square, GoDaddy Inc. and WooCommerce will be able to sell products more easily on Google search, Maps and YouTube. Last week, Google introduced that feature for Shopify merchants and is now adding the Canadian company’s payments product, Shop Pay, as an option for consumers. Google also plans to display buying options more prominently on its sites, adding even more ways to turn it into an e-commerce bazaar.

For Google and its allies, the strategy is about continuing to ride the pandemic e-commerce boom. Internet companies have piled on to capture more of this online shopping market estimated at $4.89 trillion globally in 2021 by analyst EMarketer.

“Consumers can now buy direct online, on social media, on a search, on video, on maps — that is the future of retail. Entirely about consumer choice,” Harley Finkelstein, Shopify’s president, said in an interview. “Google owns the majority of those digital town squares, and that’s where consumers are spending time.”

Over the past decade, Google has made various attempts to bolster its lucrative advertising business with e-commerce, including a delivery service and megadeals with retailers. Most attempts didn’t stick. Still, the company’s comparative shopping service became the subject of a huge antitrust case in Europe.

In early 2020, Google hired Bill Ready, a former PayPal executive, to run its commerce efforts. One of Ready’s earliest decisions was to kill the fee Google charged merchants to list on its shopping service. Over the past 12 months, the company has seen an 80% increase in participating merchants, including “significant growth” among small and medium-sized businesses, Google said in April.

Google doesn’t disclose sales related to e-commerce. But the company said consumers show clear shopping intent on its services more than 1 billion times a day.

On Ready’s first day at Google, Shopify’s Finkelstein called him. As the two companies began talks, Shopify, which lets businesses set up e-commerce operations, saw a spurt in growth during the pandemic lockdowns. Shopify has 1.7 million merchant clients globally and the Shop Pay feature has generated more than $20 billion in gross merchandise value since 2017. In addition to the commerce tie-up with Google, Shopify announced a deeper partnership with Google Cloud.

For businesses that rely on Shopify to sell online, the pitch to market through Google is also about what the search giant isn’t. Many merchants must put up with the pricing, control and occasional direct competition from selling through online marketplaces. “There’s no tension with Google,” said Finkelstein.

Of course, the unspoken marketplace is Amazon, the Goliath retailer with fast growing third-party seller and ads businesses. While Amazon’s pricing and behavior have upset plenty of merchants, it remains a go-to destination for online shopping, which is a lingering threat to Google’s core search business.

“Google loses if your homepage for e-commerce becomes Amazon.com,” said Bryan Wiener, chief executive officer of Profitero, an e-commerce analytics firm. Yet Google’s edge may be in helping businesses that already pay to promote their products on Google turn around and sell it there, too. That’s particularly true of smaller, older companies. “Going direct-to-consumer has been a lot harder than many of them anticipated,” Wiener said.

With its new tools, Google will let retailers sell directly on Google Maps and list product features, availability and ratings on the Shopping tab. Google will also add more buying features to its Image search page, an area historically devoid of commerce. Google said it’s testing a service to put more buying functions directly inside its YouTube video platform.

For some brands, though, Google search ads remain the most desirable real estate. Google slaps on carousels of paid images at the top of search and Shopping page results for many commercial queries. “Having a visual presentation at the top is a gold mine,” said Eugene Furman, the marketing chief for Xena Workwear, a woman’s apparel line based in Milwaukee. The online brand spends about $10,000 a week to market on Google and regularly sees two to three times return on sales, Furman said.

Like Amazon, Google sells its own consumer devices, including phones, thermostats and WiFi routers. Ready described it as a “small slice” of the company’s shopping services. “We are not the retailer,” he said. “We have no aspirations to be the retailer.”

Ready declined to discuss if Google had further plans for shipping and fulfillment, but he and Finkelstein said the two companies were looking a range of further collaborations. Google recently had a sizable shopping partnership with Walmart Inc., until that dissolved.

Most Related Links :
verity news now Governmental News Finance News

Source link

Back to top button