1. Market Data
December 16, 2014

Google to compete with Amazon, plans shopping service enhancements

Google is planning various enhancements to its shopping service to directly counter Amazon, which has been consistently slicing off pieces from Google’s search-advertising business pie.

Google is planning various enhancements to its shopping service to directly counter Amazon, which has been consistently slicing off pieces from Google’s search-advertising business pie.

The move is in line with Google’s ambitions to popularise its own shopping service by making users stay longer on its pages. Until now, Google Shopping used to refer shoppers to merchants’ websites via links in search results.

Sources familiar with the matter told Wall Street Journal that various retailers have been approached by Google to create a "buy" button for its online shopping site which is quite similar to what Amazon offers through its "one-click ordering" feature.

A "buy" button would enable Google users to provide one-time shipping and credit-card information to Google, which would be passed on to retailers to secure the order.

But unlike Amazon, Google wouldn’t sell or ship products itself. It is aiming to streamline shopping for users to enable them to search longer for products on Google instead of switching to Amazon.

Sources further add that a marketing programme for merchants is being considered by the search giant that would enable them to promote two-day shipping for products purchased through its shopping service. This in itself is similar to the service offered by ShopRunner for a $79 annual fee.

Discussions are still at a preliminary stage, with outcome uncertain. Google has refused to divulge further details.

Google has lost most of its search-advertising market share to Amazon in recent years, as customers increasingly search for products directly on Amazon.

Forrester Research said that in the third quarter, 39% of US online shoppers researched their purchases on Amazon and only 11% on search engines like Google, a gap that has widened from 2009, when 24% researched on search engines and 18% on Amazon.