Who Will Decide The Future Of Retailing In Google VS Amazon?

The retail industry is coming to a great war. Most people may not feel that the two sides of the war are competitors.

After all, Google is a search engine company, and Amazon is an online retailer.

What prompted them to fight against each other?

To put it simply, Google mainly relies on advertising revenue, and a large part of its lucrative advertising business is to facilitate people to buy goods and services.

That's what Amazon is good at.

As shopping related search requests begin to move from Google search to other places, Google's profitability is facing a direct threat.

Analysis and software company SDL recently conducted a survey to find out which three of their preferred gift buying platforms are in holiday shopping season this year.

The survey showed that "online search" accounted for 45%, less than 49% a year ago, and the most popular channel was Amazon, which rose from 31% to 37%.

The click through rate of product display advertising is also higher than that of Google keyword advertisement. 21%.'s profit margin is facing downside risks. Amazon's involvement in product search field obviously poses a great threat to Google.

Amazon launched its seller service 15 years ago, and then began to evolve from online retailer to e-commerce platform.

In the process, it has opened its huge logistics infrastructure to third party sellers.

By the end of 2013, Amazon's platform had some 2 million sellers using Amazon Services and appeared on the website's product search results.

Today, 40% of Amazon's unit sales come from third party sellers, accounting for 20%. of their revenues.

There is no doubt that a large number of third party sellers have made the choice of goods on the Amazon platform richer. This is one of the reasons why people tend to search for product services on Amazon instead of Google.

Google shopping search

Amazon has a public relations problem: people like the convenience it brings, but many people worry that its mode may lead to the decline of local retailers.

And Google has the ability to make full use of Amazon's potential weakness.

Unlike Amazon, Google is not a retailer but a source of customers for retailers.

It makes money through advertising rather than the paction itself, which is the essential difference between Amazon and Amazon.

(Note: in addition to digital media, Google Google Play stores sell goods directly to end-users and compete directly with Amazon and other companies.

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In the past few years, in response to the impact of Amazon, Google has changed the way it deals with shopping related searches.

To be honest, its early shopping function is puzzling. Search ads are adulterated with free display products on its shopping website, which is not connected with its main search results page.

Google has made significant changes in recent years.

Now, when you search for "microwave oven" (microwave oven), you will see the commodity grid on the right side of the search results.

From the grid click "Shop for microwave oven on Google" (buy microwave oven on Google), you can filter out the merchandise nearby.

Click on one of the links, you will see the introduction of the product, highlighting local retailers, pricing, links to other retailers and other information.

Google's moves in shopping are more than that.

Its Google Express aims to make Google's shopping experience even higher by providing convenient distribution options.

Google Express currently covers only a few areas, including Boston, Chicago, Manhattan, Washington DC, Western Losangeles and bay area (providing overnight services for the rest of northern California).

Although there are small businesses in the Bay Area participating in Google's project, the company obviously focuses on those larger retailers.

Because they have more product inventory, their IT systems can easily integrate their products and directories with Google's search results.

The expansion of the project to a more popular small retailer will cost a lot of effort and money.

Relying on third party sellers, though, does not require Google to invest huge amounts of money in building storage centers like Amazon, but this mode will bring many other problems.

Relying on the disadvantages of the third party

Consumers want the online shopping process to be simple and secure, while relying on the third party distribution will make things more complicated.

I have created and operated an online car purchase service called CarPoint for Microsoft.

In its prime, CarPoint served 7 million customers per month.

It is a very good service and has been favored by customers, but we have encountered two very difficult problems in operation.

The first problem is to standardize our car specifications information from manufacturers and third party content providers such as Kelley Blue Book.

We do this in order to facilitate customers to compare automobile products, but this work is very troublesome.

And that's only a product involving Google, which has a lot of products to deal with. Amazon has great advantages in this regard.

However, in terms of information processing, few companies can compare with Google.

The company is trying to integrate its knowledge map and AI technology to create powerful pattern recognition technology.

I estimate that this technology may also be applied to solve the product showcase challenge of Google shopping service.

Therefore, Amazon's advantage may not be sustainable in information processing.

The second problem of running CarPoint is much more serious: we rely entirely on local car dealers to complete the paction.

When they do well, our customers will be very satisfied.

But when they are not doing well, we have to suffer. We have to mediate the customers from time to time.

To be honest, the success of our intervention depends entirely on how many chips we have on our hands, that is, how much business we have brought to the relevant distributors.

I do not want to play down this problem, because it matters.

I also don't know who is better at subdividing the market now than Google, which is very good for Google to ensure that its partners provide good services to customers.

Google's Trusted Stores project is part of that effort.

Google delivers with Uber?

We are talking about the collision between two different strategies, one side bet on paction processing platform, and the other side bet on information processing platform.

No matter what strategy you adopt, you have to deliver the goods to the customer.

In December of last year, Amazon CEO Jeff Bezos announced on Sixty Minutes that the company plans to launch the delivery service of Jeff.

Not long after, there was news that DHL and Google were launching similar projects.

The FAA's new air traffic control plan does not involve UAVs.

Even if the NASA is exploring alternatives, Amazon and Google's UAVs may have to wait for some time to put them into operation.

Is there any other way to distribute online retail orders? How can we make use of the software based scheduling of debased motorcade? How can Uber crowdsourcing drivers deliver orders to Google express service?

You know, Google has invested Uber $250 million through its venture capital agency.

It has also integrated Uber in map service this spring, and Uber may also be part of the company's driverless car project.

Uber has been testing its courier capability of crowdsourcing drivers.

Projects like Google Express will be a natural extension for it.

Insiders also believe that Uber is a natural takeover target for Google.

I agree with this that Uber will be a very valuable asset in the battle between Google and Amazon.

Local retail market

After 20 years of online retailing, physical retailing and virtual retailing must now be better integrated than ever before.

That's because we no longer use our desktop only to use the Internet.

The explosive growth of smart phones has greatly boosted mobile search.

By 2015, mobile terminals should surpass the desktop in terms of search volume.

Google not only focuses on advancing at both ends.

In the US, its desktop end search share is 67%, and its share in mobile terminals reaches 83%.. The company now wants to pform its mobile search advantage into its shopping strategy by understanding how to bring business to local businesses.

In essence, Google's strategy is determined by its "organizing the world's information to make it useful, for the purpose of people's acquisition".

Therefore, it is not difficult to understand that Google's shopping bet is more about the information processing behind the product service, rather than the product service itself.

Therefore, even if you have completed the paction through Google, you can know which retailer behind it is offering you goods.

Let's compare Amazon and its mobile strategy.

Its Fire mobile phone is widely regarded as a "merchandise display" tool designed to help customers find products from local stores and then buy them more easily on Amazon.

Its mobile scanner Amazon Dash is a more obvious example of this strategy.

Fire phones and Dash are just extensions of Amazon platform.

These tools highlight Amazon's strategy, in essence, its strategy is determined by the advantages of its e-commerce platform.

Amazon seller service allows other

Relying on Amazon's huge deal to process infrastructure.

When you buy things from these third party sellers on Amazon, you rarely notice their brand names.

From the buyer's point of view, you seem to have bought it from Amazon.

We are about to witness a war between Amazon and Google, and Amazon's challenge to Google will obviously exceed that of apple, Facebook or Microsoft.

The two strategy will not win.

In fact, the scale of the market is large enough to allow the two strategies to coexist simultaneously.

This competition will only make people's shopping experience more convenient. I personally think there are both advantages and disadvantages.

I am glad to see that Google takes a strategy that depends on the survival of local retailers.

The good times that belong to the local shops have long ceased to exist.

Nowadays, to survive or even thrive in the high-tech retail environment, even small retail shops have to be armed with technology, which means that a considerable portion of their income will flow into the pockets of technology giants.