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Google’s Impending Showdown With Amazon

Written by Daniel
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In Episode 8 of our Industry Spotlight series the Flaunt Digital team discusses Google & Amazon, and how the two brands are increasingly competing with each other in the tech space. Why not subscribe to our YouTube channel for more videos like this?

See below for the full video transcription.



Chris: There’s been a couple of announcements in recent weeks from Google that suggests that they’re trying to infiltrate Amazon’s space a little bit. They’re trying to create a shopping marketplace similar to Amazon, so standing on their toes a little bit. Where I think this comes from is a little bit off the success of the shopping campaigns that they’ve had in search, and obviously they’ve created a bit of an environment and a bit of a following over that in recent years. And I think a couple of the products announcements in recent weeks with the Google Actions suggest that they’re trying to create a similar ecosystem to Amazon in shopping.

Lee: It’s interesting that Amazon are working on their ad product and Google are working on their shopping proposition.

Chris: Yeah, I know. I think they’ve got a bit of catching up to do. But I think, based on the results that they’ve released, it suggests that shopping ads now drive more revenue than any other ad format in Google Search. So, obviously that works for advertisers, and that works for them as well.

Lee: Yeah. They’ve got the Cart functionality, where you can add multiple items from different retailers as well, don’t they?

Jamie: Has that launched yet?

Lee: I think so, or it’s gradual. 

Chris: The shopping actions has launched in the U.S. but it’s yet to come to other markets.

Jamie: That’s interesting though, because that’s a leg up on Amazon really, isn’t it?

Chris: Yeah. Yeah, massively. I think, yeah, with the Universal Cart that they’ve tried creating as well, it is massively direct competition with Amazon, isn’t it?

Jamie: How does the fulfillment work with that then?

Chris: It’s a Google server Checkout from what I understand.

Jamie: What, I mean, you get your packages from each different retailer separate?

Chris: I think so, but I think the overarching goal that they’re trying to aim for is doing their own fulfillment and their own logistics in the same fashion that Amazon do. So eventually, I’ll imagine once they’ve developed the full logistics in the End-to-End that Amazon offer at the minute. I think that that’s the overall goal, I think, with this.

Lee: Cool.

Chris: They’re just trying to imitate the same thing, I mean, why wouldn’t you? They’ve got the full marketplace down haven’t they when it comes to retail, so why wouldn’t you want to leverage that? And I think the new Google Actions, which has been announced as well, which works in a similar way to what Amazon does with the… Basically it’s a cost-per-sale model for advertisers and manufacturers. So, essentially, you won’t have to spend too much money in getting your products to market, like you do have to now as an advertiser on Google, Google will naturally promote manufacturers who do a good job of fulfillment and things like that. So that’ll mean that that’s an organic reach on a cost-per-sale basis for anybody that participates in the program.

Lee: If Google can execute this well, they’ve already got the infrastructure for things like reviews, if they can do the fulfillment, and I think that Amazon do really well, because they’ve got such a comprehensive ad product, I think they could win.

Chris: Yeah, I believe so. I think the only thing that Amazon have got up over them is obviously the history. They’ve got the audience, haven’t they? They’ve got the full End-to-End logistics that Google haven’t got that are in development, I think. But it’s going to take a while to get that following and confidence from manufacturers as well. But, I think that they’re pretty much just trying to, you know, create the same model, aren’t they? Essentially off the back of the success that they’ve had, and the Universal Cart will just make it easier. But they’ll have to do a hell of a lot of advertising, I think, to get that out there and get people to…

I don’t know whether they’re expecting people to shift from Amazon to Google or just have both competing in that space. It will be interesting how manufacturers and obviously suppliers decide on the platform. I guess it’s who’s going to offer the most competitive rates, who’s going to give them the best organic reach for the products. For a period of time, it might be invitation-only I would have thought on programs like that, and who knows how their algorithm in prioritizing, you know, manufacturers and suppliers will be in contrast to Amazon. It’ll be interesting to see how that works out, and whether it’ll actually be profitable for suppliers, I don’t know.

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