Google is still seen very much as the market leader when it comes to search. Yet this is changing when it comes to products and shopping, one of the most important ways of monetising search. A recent (October 2015) BloomReach survey of consumers revealed that 44 per cent bypass the rest of the web and head straight to Amazon when they are looking to buy a product.
And they are buying products in ever-increasing numbers. According to the Commerce Department, total online sales in the US for 2014 were more than $304 billion, with Amazon accounting for around 30 per cent of that figure. So how has Amazon achieved this advantage over Google on product search and what are the broader e-commerce industry implications?
The Amazon marketplace
Amazon attracts customers and searches in part, because online shoppers know that they will find everything they need or want on Amazon, whether directly or via its marketplace, which accounted for more than 40 per cent of total units sold on Amazon in 2014, according to internetRETAILER magazine. And even in the rare cases where the product is sold neither from Amazon, nor from a marketplace vendor, Amazon will point the consumer to a site that sells it, capturing affiliate marketing revenues in the process.
Through its marketplace, Amazon has extended its product catalogue far beyond what mankind had ever envisioned (without the cost and hassle of inventory), and far beyond what other retailers could ever hope to compete with, on their own anyway. If the customer starts a journey on a site and finds choice, price and great service, why would they need to go elsewhere?
Google search – disrupted by paid ads
When people use the web to search for a product, they will almost certainly be interested in the organic search results. They aren’t searching for an advert, they are searching for a product or information about that product.
An issue with Google is that it monetises search by allowing paid ads to appear above the organic results. That’s fine, that is the business model it has chosen, but it means that consumer searches will be disrupted and perverted by these ads. Searching for a product via Amazon means that a consumer gets a comprehensive list of the products that match their search – ads have no influence whatsoever, meaning the Amazon search engine correlates to the reality of the web.
The rise and rise of smartphones
According to a 2014 IMRG Capgemini Quarterly Benchmarking Report, more than half (52 per cent) of visits to retail websites now come via a mobile device. When you factor in the rapid adoption of smartphones (over 80 per cent in the UK) and their widespread use as a shopping device, it means that Amazon is even better equipped to take on Google on product search.
Smartphones are often used for rapid research when shopping and Amazon’s app dominates this market, meaning many shoppers will start their journey there. Amazon drives more than 50 per cent of its mobile traffic growth from app users, which according to Morgan Stanley can lead to ‘lower long-term customer acquisition costs, stickier customer bases, and a greater share of consumer wallet’.
Amazon as point of entry and point of sale
Amazon’s success as an e-commerce firm has been well-documented – its ability to beat Google on search, much less so. But thanks to the volume of products that Amazon's marketplace allows it to offer, that is the reality.
An online marketplace can capture the consumer’s attention by offering all the core elements of e-commerce – price, choice and service. Other retailers are adapting the marketplace model in ever-increasing numbers, as they see how a good marketplace can act as the search engine and keep a customer on their site.
Adrien Nussenbaum, CEO, Mirakl Inc