Google’s Buy Now Could Mean Amazon Trouble Now
Google is contemplating a “buy now” button for its Google Shopping service, whereby users could shop from merchants listed on its pages. That’s certainly a direct challenge to Amazon and to consumers and regulators, too.
This functionality could help keep users longer on its own pages to do their shopping from Google retailers rather than shifting to online retailers. Until now, Google Shopping has referred shoppers to merchants’ websites via links in search results.
Users would provide shipping and credit card information once, to Google, which would then pass the information to retailers to fulfill orders.
But it’s not good news for Amazon, which, as of late, has been trying to fend off challenges from retail giants, Best Buy and Wal-Mart. Google’s move could hurt Amazon in two ways. First, it can slow user traffic to its site and eventually hurt sales. Second, it can fuel an online price war, which will further squeeze Amazon’s razor-thin operating margins.
It was only a matter of time, however. Amazon could not have expected to stay at the top of the heap, without competition for long. After all, healthy competition is good for the marketplace. It keeps pricing in line, neither too high or too low, and it keeps services honest, i.e. delivery guarantees are met and customer service quality remains high when another company is nipping at your heels.
It begs the question of when other sites will follow suit, such as Pinterest, which could get into the retail game with a “buy now” button fairly easily. Watch out Amazon!