Amid all the flurry of news Google announced at its 2021 I/O developer conference, one thing stood out to me: the launch of the Shopping Graph. The announcement may not be as glamorous as, say, Android 12, but its importance isn’t to be ignored. While Google is putting forth the full power of its search engine towards commerce, similar to what it’s done with the Knowledge Graph, the discoverability of products online will definitely be changing, simplifying the experience while uniting e-commerce players against a common foe: Amazon.
Can Google control inspiration to action?
We know that there’s a whole lot of searching taking place on Google. It is the main job of the…*checks notes*…search engine, after all. People are searching the internet for any number of topics, whether it’s the latest sports scores, how-to tips, cookie recipes, and even shopping advice. Google says that there are more than a billion commerce-related transactions taking place on its platform daily. That’s a lot.
So here’s Google’s plan to improve it. If you’re interested in how it benefits merchants, then check out this blog post. I’m focusing more on the consumer side here. At the core of the company’s strategy is the Shopping Graph, which Google claims to aggregate information from websites, prices, reviews, videos and other product data into a single place: the search engine. It’s about streamlining your journey to get the information you specifically want.
I’m interested in purchasing an e-bike to get around town. First, I might search on Google Maps for nearby stores where I could look at a bike first-hand or take a test drive. But I’m not even sure what kind of bike I want or which one is best to get. I then might do a general search for bikes, finding websites that have different information about the bike, such as reviews, descriptions, or videos. With the Shopping Graph, Google could provide the information I need in a single place, saving me time and energy.
Pulling in content from websites and product manufacturers might be easy but what happens if I’m keen on making a purchase? Finding a retailer to buy from can be another friction point in my commerce journey. Google not only doubled down on its partnership with Shopify but also struck deals with WooCommerce, GoDaddy and Square.
Though Google positions the Shopping Graph as a means to help you shop, no matter the “phase” you’re in, be it from inspiration to action, ultimately you’ll likely stay longer on Google’s platform, helping to not only train its artificial intelligence with your queries but also increasing ad display opportunities.
An unlikely tag team?
There’s an ancient proverb commonly used that seems appropriate here: “The enemy of my enemy is my friend.” Shopify, WooCommerce, GoDaddy, and Square compete with Google in some areas, but all have joined forces to counter the dominating power that Amazon holds in e-commerce.
Amazon has become so ingrained in our society that I bet if you were wanted to buy something, you would instinctively think about Amazon’s website. But while the Seattle-based company holds massive mindshare, it doesn’t exactly control the internet. Yes, it has its fingers around the smart home and in practically everything relating to a marketplace — and I’m purposely ignoring Amazon Web Services (AWS) for the purpose of this post. However, Google has greater access to the entire internet, indexing everything and organizing it all into something coherent and relevant to us.
The e-commerce landscape is also changing. Amazon’s power is starting to wane, creating an opening for competitors like Shopify. This chart produced by the venture capital firm Accel Partners illustrates how merchants are becoming more interested in establishing a stronger relationship with customers versus joining the masses shouting for attention like you’d have on Amazon.
As Axios notes, the pandemic drew millions of small businesses online and it looks like they’ll stay once economies start to reopen. While the article didn’t address Amazon, it did list out some interesting statistics, namely:
- Stripe CEO Patrick Collison tweeted Thursday that “more businesses launched on Stripe since the start of 2020 than did in the rest of Stripe’s history before then.” For reference, Stripe launched in 2009.
- Etsy: The number of active sellers on Etsy soared from 2.7 million in 2019 to 4.4 million in 2020, the company said in May.
- GoDaddy: The world’s largest internet domain registrar, GoDaddy said last year it added 1.4 million net customers — nearly double the amount it added in 2019.
Google made a strategic partnership with e-commerce platforms that do well with small businesses. And by ensuring it has the data from merchants, Google is able to better position itself as a viable competitor against Amazon when it comes to product searches. You might use Google to query about the weather, directions, or random fun facts, but Amazon holds the lead in being the first place for product searches.
I’m curious as to whether merchants feel strongly about Google pulling in data from their e-commerce platform into search results. They may not, if the listings are free and the sellers gain much of the transaction benefits, minus any advertising on Google’s platform (more on that later). But remember that chart from Accel referenced earlier? Google doesn’t seem to be interfering in the merchant’s ability to collect email addresses or other customer data. All of that belongs to the business, at least through the e-commerce platform.
Google Lens: The secret shopping weapon
Google has many inputs from which it can obtain data, especially online. But what about offline? That’s where the camera can give the company a big advantage over Amazon and it’s thanks to Google Lens. This tool scans images captured by the camera and scours the internet for them, which can be incredibly helpful if you’re shopping.
Remember that eBay campaign that aired on TV a few years ago where the people in the commercial would see someone wearing a particular clothing item and then swipe through the eBay app to find it? That’s what Google Lens is but streamlined. You can take a photo of it and Lens will scan it and pull up relevant merchandise. It’s something that Samsung once touted its Bixby Vision could do and also technology being utilized in IKEA’s and Target’s mobile apps, thanks to Pinterest.
Amazon doesn’t have this feature yet, but even if it did, it’s not installed on more than 3 billion Android devices worldwide. And finding the right product to buy isn’t always easy to identify. You might want a particular piece of furniture but you won’t be able to name the piece or even concisely describe it so Amazon can show you the item. But if you happen to have seen the product elsewhere or maybe you drew it (wonder if that works?), then Google Lens could then not only help define it and help you buy it from a small business or merchant without needing to leave a Google property.
It’s ultimately about advertising
Seven years ago, I questioned Google’s dominance in search advertising after Amazon was reportedly working on its competitive service. In reality, Google still maintains a strong grip on ad revenue, even when factoring in the potential of Facebook. But when you look at 2019 and 2020’s data, Google’s share of the pie dropped by nearly 3 percentage points while Amazon and Facebook gained, though the former saw a larger increase.
The longer someone spends on Google, the more data the search engine gets and can display ads. And the law of probability suggests that at some point you might even click one of these ads, helping Google make money.
You might think that Google’s just made it easier to shop because everything has been streamlined under a single app, but really you’re still on its digital property so while the merchandise sale goes to the business, Google gets something much more valuable, your data. And if you had a great experience, your loyalty to do all future shopping there, taking way a customer from Facebook, Amazon and all other would-be competitors.
The predictions made years ago have come true
In 2014, Bill Ready was the chief executive of Braintree, a developer platform, that had recently been acquired by PayPal. He wrote a post entitled “Hello, smart commerce,” in which Ready predicted the future of e-commerce. Among his prognostications was the belief there would be a significant uptick in mobile conversions, the average order values would increase as a result of convenience and personalized experience, and there would be a further blending of e-commerce with that of in-store shopping.
In just a couple of years we’ve come to expect our apps — think Yelp, OpenTable — to know our tastes and provide relevant, context-driven experiences. Mobile will soon become synonymous with personal concierge.– Bill Ready, PayPal’s Chief Operating Officer in 2014.
My, how things have changed in more than seven years especially with the acceleration of technology. Ready would leave PayPal in 2019 to join Google as its President of Commerce. The shopping graph is his brainchild, or at least fell under his purview. I wonder how he views his predictions now and if asked, what his vision for the shopping landscape would be next.
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