Google turns shopping around into a money spinner
Philip Ellison 17 September, 2012 at 02:09
It is incredibly easy to come up with reasons why online shopping has usurped traditional spending channels in such a seemingly ubiquitous and complete way. Market leaders like Amazon boast the widest product ranges, including massively discounted items, with quick and inexpensive delivery options and simple, easy to use checkout systems. And with massively popular, reputable and user friendly platforms like eBay enabling budding entrepreneurs to set up their own e-commerce ventures from their bedrooms, anyone has a chance at success.
Not to mention that Alibaba, the Chinese e-commerce site, is reported to be processing higher sales than Amazon and eBay combined, testament both to Alibaba’s growing dominance and the considerable buying power of China’s internet users. Put simply, the way we furnish our homes, build our personal libraries and fill our wardrobes as a global population has changed drastically.
Also, a frugal culture appears to have arisen post-financial crisis. “Shopping around” has become an integral component of the buying process, with a multitude of consumer forums springing up to offer advice on where to find the best bargains. The proliferation of smartphones in recent years has also played a role in the increasing number of online shoppers. While a generation of tech-savvy youngsters have always used the internet as a shopping medium, parents and even grandparents are also now using mobile apps such as Google Shopper to compare prices on items.
Google may well be behind further developments in how we compare and buy products. The popular Google Shopping function, which features as a vertical on Google.com, has previously enabled users to browse organically generated search results by relevance, user reviews, and price. Back in May, it was announced that this model would be restructured to feature paid listings. Later this year, US search results on Google Shopping will consist entirely of paid listings, although they will still be ranked in terms of relevance. This new search practice will be rolled out across Europe and Asia in 2013.
Google is also borrowing heavily from Amazon Marketplace with its new Google Trusted Stores programme, first introduced in the Spring, which offers purchase protection on all orders with selected merchants.
Some online retailers have responded negatively to the proposed changes, as they will now be expected to pay for a previously free business channel. Sameer Samat, vice president of product management at Google Shopping, blogged: “We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date.”
However, there is also the very real risk that shoppers will be no happier with this new arrangement than the merchants. Kristopher Kubicki is the co-founder of Dynamite Data, an organisation which monitors e-commerce sites for retail clients. He summed up the potential for backlash when speaking to The New York Times: “Sooner or later, the consumer stops trusting the application because it’s not really a comparison anymore. It’s just an ad.”