Biggest Search Engine to Charge Commission for Online-Shopping

March 28, 2018         By: Payment Week

Each day millions of people use Google to find a place to buy and sell goods and the world’s best-known search didn’t do anything to monetize this process. However, the times are changing and the North American Internet giant decided that it wants a piece too. It was reported, that Google’s Retail and Shopping president Daniel Alegre is in the negotiation process with the US biggest retailers, such as Ultra Beauty Inc., Home Depot Inc., Target Corp, and several others in order to team up and create a brand new online shopping platform.

The new system will allow the retailers to connect their goods to the users’ search requests, which will make it easier for the latter to find what they need. The new feature will be available via Google Assistant for mobile devices, Google Express, and, of course, the search engine itself. The direct link placement, in its turn, won’t have fixed price. Instead, the Internet giant is going to take the percentage of each purchase cost as a payment.

The new project looks good for online-retailers as they’ll finally have a chance of competing with Amazon.com Inc. Moreover, even the smallest online-stores will be able to carve out their own piece of the pie by having more opportunities to grow. The US company hopes, that the new program will make it easier for people to make purchases online not only via desktop computers but also use their smartphones and voice-operated smart home devices. The sponsored search results, however, should not affect the experience of other users, who don’t want to buy anything, Daniel Alegre said.

The customers, in their turn, will also benefit from the innovations promoted by Google — the simplification of the online shopping process and instant checkout will solve the issue of the surfeit choices the buyers are facing now. The North American company is following the trend started by current dominant online-retailer Amazon, who made unified shopping carts, checkout simplicity, and highly accurate personalized recommendations their core features.

Moreover, the innovation will also help to improve Lens system, which is used to search for goods using their pictures. The image search feature has been present for a long time. However, it wasn’t adapted for shopping purposes, thus, the company decided to fill this gap. Now the users will be able to find the goods they are interested in without unnecessary difficulties.

Considering that the new shopping process offered by Google will be integrated with already existing features of the platform, it promises to be simple and intuitive. For example, after the buyer has decided what to order, he can just google the product of his choice via smartphone and see a unified retailer’s listing and put the product to the Google Express cart. Later, the user may use his Google voice device to order anything else with a simple voice command. The system then will place both products in the same cart where the user will be able to order everything at once. Alegre also noted, that, according to Shopping Actions statistics, the average of the buyers shopping basket is constantly growing and is now 30% bigger, than it was just several years ago, which makes the new system a necessary step forward for Google. Although the forced association of competing companies via the new system should have alienated a lot of retailers, it seems to do the exact opposite by making the competition more fair and transparent.

Speaking of innovations, the retailers seem to be excited about the upcoming changes. It’s not surprising since their businesses were put in danger by the growing dominance of Amazon. Therefore, there is no doubt, that a lot of them will happily agree to use Google’s new feature. The last year deals with Target and Walmart to appear in Google Home search results proved the advantage of a partnership with Google.

According to the recent studies, virtual assistants devices, such as Google Home and Amazon Echo, will be used by 55% of the United States of America families by 2022. The success of the voice-operated assistant was proved by Alexa, Amazon’s voice assistance device, which is expected to generate about 10 billion US dollars in revenues by 2020.

Some retailers have already opted for new initiatives. For instance, Mike McNamara, the Chief Information and Digital Officer describes Targets’ shoppers as people who value their time and prefer to avoid unnecessary actions by using voice interface. Thus, it explains company’s propensity to operate in a new environment. Very soon the second-largest discount store retailer’s client will be able to link their loyalty cards and accounts to Google and get the bonus of 5% discount together with free shipping.

The search engine design is expected to face some changes as well. For example, the button, at pushing on which new results of a search are dynamically loaded,  will be added instead of familiar next page button.

Not everyone is happy with the upcoming changes though. Cooper Smith, director of Amazon research at L2, believes that the main goal of the retailer giant’s and world’s most popular search engine alliance is to dethrone Amazon. He believes that the only way for them to compete against the current online-shopping king is to gain critical mass by combining their audiences.

Just a few years ago, nobody would believe that US biggest retailers will have a public dialog about having the same tactics.  Usually, such big corporations are extremely tight-lipped when it comes to possible strategic decisions. However, it seems to be the time for them to end with the secrecy and unite in order stay afloat.

The ads on YouTube and other social channels, Google’s display ad network and Android It’s clear, the changes to occur have nothing to do with the way people make online purchases today, it’s all about the future of e-commerce. Having access to the combined audiences of all future alliance members, Google Home will give Amazon Echo a serious competition. The next step for Google President after he is done with the negotiations is to attract its users to the new features.

Keeping in mind that the corporations who will join the future partnership already have big enough customer base, it’s very important for Google to give them a really good reason to tjoin this new initiative. If the Internet giant manages to do it, we may well witness the birth of the worlds biggest online-shopping platform.