Rumors have started that Google will be launching a “Buy” button and two-day shipping to help them compete with Amazon, thanks to a Wall Street Journal article published yesterday. The button would be similar to Amazon’s “one-click ordering” features, which allows you to purchase products from a single click if all credit card and shipping information if already stored in your account.
This announcement comes on the heels of similar ecommerce initiatives and features by Facebook, Twitter and even Tumblr, allowing users to purchase products directly from a post, tweet or blog, respectively. It seems everyone is getting into the ecommerce game, and it’s no wonder with sales growing 30% year over year, according to Bigcommerce.
So what does this mean for merchants and brands? Pros and cons to these new ecommerce initiatives abound. Let’s discuss both sides of the issue:
Advantages to Social & Search Commerce
1. More Traffic and Visibility
Google has 5 billion searches per day, Facebook has 864 million active users per month, Twitter has 284 million users and Tumblr has 98.5 billion posts to date. That’s a lot of activity and people, which equals a lot of buying power. Some might argue that if they’re making purchases, it doesn’t really matter where it’s coming from. Money is money.
2. Shipping Advantages
If merchants don’t have two-day shipping, Google’s program may allow them to provide this, thus providing more efficient service to customers and leveling the playing field for all merchants.
3. More Data
This is simply conjecture, but Google and social channels may provide more data to those participating in these commerce programs, allowing them to better understand buying habits and user insights. This may circumvent the need for such analytics programs on the merchants’ sites, thus reducing technology fees and potentially analysis fees
Disadvantages to Social & Search Commerce
1. Reduced Traffic to Actual Merchant Sites
If purchases are made directly from Google or social networks, the user has no reason to visit the actual merchant site. This reduced traffic would result in a number of other concerns, such as reducing opportunities for building brand loyalty with customers, eliminating control of the shopping experience, reducing opportunities for remarketing users that didn’t convert or bringing back customers for repeat purchases, reducing ad revenue for those sites that sell ad space, reducing volume of reviews posted on the site and reducing opportunities for sharing products, wishlists or purchase notifications on social channels.
2. Higher Advertising Prices
With more ads comes more data in Google’s directory about ad and product performance as well as more competition. This would likely lead to higher ad prices for all advertisers.
3. More Clutter in Search and More Noise in Social
Many brands and advertisers will jump at the chance to test these new advertising channels. These new ad units and buttons may simply seem like clutter or noise to users, creating blindness to all listings and posts and, as a worst case, abandonment of these channels. While extreme--we all know that it will take a lot to get people to stop using Google, Facebook and the other social channels--there’s still a chance that the culmination of all these new commerce features will act a final straw, pushing users away and on to something new and less clutter. But then again, is anyone still talking about (much less using) Ello?
At quick glance, it looks like the positives outweigh the negative; however, the reduced traffic contains six sub-disadvantages (and I probably didn’t capture all the issues). At this time, it seems the Google, the social networks, consumers and maybe brands (if they mostly distribute through merchants and marketplaces, rather than having their own ecommerce platform) would be the winners here, not merchants. I expect some uproar initially, but won’t hold my breath for these features to be cancelled, much less a mass exodus.