Posted on : June 20, 2018
There’s no denying that Amazon has become a behemoth in the e-commerce industry, singlehandedly having become synonymous with the term “online shopping” over the last decade. Due to its booming popularity, Google Shopping is stepping onto the scene, and its new features are worth strong consideration if you’re a retailer.
Google and Amazon have been competing against each other in the e-commerce industry for years, and although there have been some overlaps in strategy, the two still boast very basic difference for shoppers and retailers. Amazon customers/subscribers are loyal, meaning they will always check Amazon before they look anywhere else for what they need. Even if they do not end up purchasing off of Amazon, they use it for price comparison. Many retailers are still hesitant about selling on Amazon, however, meaning you won’t always find the brands you like. For successful brands that sell on their own site, Amazon is viewed as another competitor.
Google, on the other hand, offers a wider variety of brands and options through its Google Shopping and newly implemented Google Express platforms.
Amazon Fever: Who Buys & Who Sells
Amazon customers are illustriously “price-loyal and value-focused”, meaning they are keen on finding the best price and religiously subscribe to its services. According to a study by BloomReach, 55% of shoppers begin their product search on Amazon. Despite this high statistic, however, nearly 70% will price-check the product on other retailers’ websites against Amazon.
Although Amazon users are devoted, they still ultimately want the best deal. Amazon can oftentimes offer this, but it’s something to consider as a retailer that doesn’t want to place their product on Amazon. Making sure you have the lower price will ultimately be key.
The value-focused aspect of Amazon customers is their willingness to spend over $100 per year in order to spend even more money on their platform. As of 2016, Business Insider reports that 44% of U.S. households have Amazon Prime subscriptions. The increasing popularity and conveniences that come with this program (two-day shipping, grocery delivery, even same-day shipping in some cases) will likely only increase the number of purchases completed on Amazon, despite price discrepancies.
Still, while more name brands are moving to Amazon, it primarily draws re-sellers. A high volume of re-sellers means commoditized products will need to be sold at competitive prices (and with competitive shipping offerings to boot). If you are a re-seller, you’ll need to face the prospect of less profit in order to succeed on Amazon. The good news is that lower prices mean higher customer retention, which in turn means decreased ad spend. Most customers will remember the seller with the best prices. In fact, price is what consumers usually remember best about a product.
The Googleverse Expands with Shopping & Express
While Google Shopping has long been Amazon’s slightly less cool rival, the search engine is stepping up its game with the recent roll-out of Google Express. The major difference here is how the actual purchase happens. Google Shopping not only features a multitude of products from name-brand retailers (from Best Buy to Macy’s), but it redirects buyers to the retailer’s website directly to complete the purchase.
This allows users to effectively price-check similar products across retailers on one platform, and still benefits retailers by sending the buyers to their site where they’re likely to continue browsing. In fact, Google Shopping is so popular among retailers, it accounted for 80% of U.S. retail search ad spend in Q1 of this year.
The roll-out of Google Express will be a game-changer, as unlike Google Shopping, it allows users to purchase from over 40 retailers (such as Costco, Fry’s, Target, etc.) directly through Google. This makes it a more direct competitor with Amazon. Like Amazon, Google Express retailers can offer free/low-cost shipping incentives also. Google Express also makes ordering products through the Google Assistant/Google Home possible, similar to Amazon’s Alexa.
The ultimate advantage of Google Express? Those results will show above Amazon in the search. Even with Google Express aside, the power of Google over its own search engine will always beat out competitors when it comes to product searches that start on their website. Even just a simple search for “dress” on Google will populate the Google Shopping results above all else, with Amazon not even showing up on the first page.
Paid Search on Amazon vs. Google
When it comes to paid search, it’s probably quite obvious that Google is still king. Amazon does allow for Sponsored Products advertising at a lower cost-per-click (CPC), but its advertising platform is not as well-established yet. There is much less competition on Amazon and, as a result, much less attention is paid to sponsored ads. On Google, not only do you have more traffic, but more related products to compete against.
The benefit of advertising on Google, aside from its lower CPC and larger amount of general traffic, is that most searches are on mobile devices now. What this means for users that begin their product searches on Google is that they will see almost exclusively the Google Shopping ads. As previously mentioned, Google Shopping ads are almost always the top result. This is even more prominent on mobile, where not as many results are shown, meaning the Google Shopping ads practically dominate the screen.
Lastly, Google paid search allows you to monitor traffic and conversions as a result of our ads, whereas Amazon’s advertising database doesn’t offer this kind of detailed reporting yet.
From a Consumer Standpoint
Ultimately, the platform you choose to sell on as an e-commerce company is based on where the users go — or just what kind of users you want to attract. So, it’s important to view these two platforms objectively, from a customer standpoint, and see where people will be increasingly placing their loyalty. Amazon is an excellent outlet, but Google is on the rise. Google Shopping services more locations than Amazon at the moment, and can ship to almost anywhere in the world.
Amazon Prime, on the other hand, recently announced that they will be increasing their subscription fee to $120 per year (a significant jump from their previous $99/year offer). Google Shopping lets the retailer determine the minimum cost for free shipping and, through Google Express, shoppers can utilize their rewards cards/programs from participating retailers.
Although Google Express and Google Shopping offer different things, the success of each individually will still likely increase overall loyalty to the Google platform in terms of online shopping.
The Best Option for Retailers
You’ve weighed the pros and cons, but the decision usually isn’t as simple as Google versus Amazon. Amazon will continue to dominate e-commerce, while Google will dominate retail search. This means that, as a retailer, you need to use both to your advantage. You can list your products on Amazon, but still invest in Google Shopping ads since they dominate the mobile search.
The future of e-commerce is also constantly being shaped by these two giants. Amazon is attempting more to implement paid search and Google is attempting more to make itself a successful e-commerce platform, but both have a long way to go. That’s why using these two programs in conjunction will allow for you to maximize your reach and increase your sales.
Ellie is a PR & SEO Outreach Coordinator for Conversion Giant with three years of experience in digital marketing, social media management, and client relations. A former journalist, she is committed to delivering content with integrity and transparency.