Commentary

Google Shopping Takes On A (Really Big) Rival By Eliminating Commissions

In an unspoken-but-obvious attempt to entice buyers from the online service named after an endangered rainforest in South America, Google Shopping yesterday announced  it was eliminating commission fees for retailers and is opening its platform to third-party providers such as PayPal and Shopify.

“These changes are about providing all businesses -- from small stores to national chains and online marketplaces -- the best place to connect with customers, regardless of where a purchase eventually occurs. With more products and stores available for discovery and the option to buy directly on Google or on a retailer’s site, shoppers will have more choice across the board,” Bill Ready, Google’s president, commerce, writes  in a blog post. 

“Existing sellers on the site will have their accounts transferred automatically to the 0% regime within the next few weeks. Those coming new to Google Shopping will be added to the no-commission program right away,” Eric Volkman writes  for The Motley Fool.

advertisement

advertisement

"This is a clear attempt to weaken the dominance of Planet Earth's ecommerce giant, Amazon.com, which features goods from thousands of outside merchants around the globe.

“Alphabet's Google is making the transition from Amazon to Google Shopping quite straightforward and simple. In its press release on the elimination of fees, it tellingly wrote that merchants can upload product feeds in the format they utilized for their Amazon online ‘stores,’” Volkman adds.

But Ready says Google is making everything “more compatible with merchants’ existing processes,” with nary a mention of what those might be.

“Google has introduced various initiatives over the years to better compete with Amazon, such as a Prime-esque same-day shipping subscription, called Google Express, that was eventually scrapped and rebranded as Google Shopping,” Annie Gaus observes  for The Street.

“Since COVID-19 began, however, many more customers are turning to ecommerce -- and analysts believe that much of the sudden shift to online shopping will wind up being permanent. According to Adobe Analytics, U.S. consumers spent $73.2 billion online in June, up 76.2% year-over-year, and are expected to keep shopping online at high levels into the foreseeable future,” Gaus continues.

Indeed, “in an interview, Mr. Ready said most retailers were already lagging behind in e-commerce before the pandemic hit. And as more consumers moved to shop online in recent months, the gap has widened with much of the growth in online sales swallowed by a handful of players,” Daisuke Wakabayashi writes  for The New York Times.

“‘We want to make sure selling online is easy and inexpensive,’ he said.”

But “while all of Google’s moves are clearly aimed at unsettling Amazon, Mr. Ready wouldn’t address its Seattle rival and refused to utter the A-word even once in a 20-minute discussion. (He even dodged a question about what is the name of the giant rainforest in South America),” Wakabayashi observes.

“Google is the world’s dominant search engine, but almost half of Americans start looking for things to buy on Amazon, while only 22% start on Google, according to a survey last year from research firm CivicScience,” Gerrit De Vynck writes  for Bloomberg.

“Google Shopping has been around for years, but until recently retailers had to buy ads to list their products, and if people bought directly on Google the seller was on the hook for commissions of as much as 12% of the transaction,” De Vynck continues. 

Indeed, yesterday’s shift follows the announcement last month that the search-engine-cum-ad-delivery-service is now providing free listings of products for sale on its main search results page.

“So why is Google doing this? Certainly, it is about supporting the commerce ecosystem and in particular driving traffic to smaller retailers that have struggled during the pandemic. But make no mistake, this announcement is not about pandemic charity. It’s about Amazon,” Bloomreach CEO and co-founder Raj De Datta posted  at the time.

“These sweetened deals may help Google attract more sellers, but they’re not enough to give Amazon a meaningful run for its money in e-commerce. Why? Try finding some products on Google Shopping, and filter them under Buy on Google -- you’ll see for yourself. The process is confusing, far from the seamless experience that’s now a basic consumer expectation,” Andria Cheng writes  for Forbes.

Cheng ran into costly shipping fees for three items under $25 she did a test order for, as well as delivery dates of July 28, July 30 and August 13. To be fair, the last two items -- a resistance band and two-pound dumbbells -- have been hard to come by at all since the coronavirus pandemic got people exercising in their living rooms.

Next story loading loading..