Google’s ‘Buy Now’ Button – Will It Weaken Retailers’ Direct Relationship with Customers?

When the Wall Street Journal reported in May that Google Inc. was planning to launch buy buttons on its search-result pages, the move was considered by many to be a rather controversial step. Going up against online e-commerce giants such as eBay Inc. and Amazon.com Inc. is believed to not only be a risky strategy, but also a potentially smart one. If it works, that is.

Last week Google unveiled its latest feature ‘Purchase on Google’, allowing shoppers to purchase items directly from mobile search ads. Testing the feature with a few retailers at first, the “buy” button will appear at the top of the page accompanied by paid or sponsored search results. Clicking on the button will take shoppers to another Google product page where they will be able to pick a color, size, and shipping options and complete the purchase.

With consumers spending more and more time on smartphones, Google and Facebook have both been stepping up efforts to make the most of location-based technologies.Since searches on mobile devices outnumber those on personal computers in many countries, the buy buttons will not appear when shoppers search on desktop computers.

Why Retailers are a Worried Lot over Google’s Buy Now Button

Google’s “buy” feature is likely to turn the company from a valuable source of traffic to an online transactional business. This has got some retailers worried that the move will reduce them to back-end order takers and ultimately weaken their relationship with shoppers.

Some brands are concerned that they will need to hand Google more data about their products in exchange for the buy button. Google has left many questions unanswered, causing some of its biggest advertisers to opt out. According to reports, Walmart stopped purchasing Google’s ads that display at what price a product is in stock and at which local store over these concerns

Google’s partners, on the other hand, are stressed that while the buy feature will reduce friction for users on mobile devices, these shoppers will continue to belong to the retailer instead of Google.

What ‘Purchase on Google’ is up against

Even though Google has quelled talks of becoming an online marketplace in the past, the company has been mimicking certain features of Amazon such as in-depth product pages with improved visuals and photos, reviews, prices, and specifications.

Amazon already has over two million merchants selling a variety of products on its website and giving the company a cut of their sales. In this sense, Amazon’s marketplace is already thriving. However, larger retailers want to collect customer information via their own websites and avoid unnecessary price competition, and as a result, they don’t work with Amazon. Even eBay has tried to get larger retailers to sell on its marketplace but hasn’t been entirely successful.

Google needs to find a way to overcome these challenges if it plans to outsell both these players.

Vice president of Google AdWordsJerry Dischler, however, says the company has no such plans. The ‘buy now’ button, he adds, is aimed solely at improving conversions on mobile and the search engine has no intentions of becoming a retailer or competing against existing retailers.

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