Questions from Auburn Communications (AU) are followed by some from Business Alabama (BA).
AU: Do you expect Google Shopping’s plan, which would allow customers to buy directly through Google, to be successful?
I wouldn’t bet against Google, but it’s going to be a big challenge. The retail behemoth that is Walmart has been trying to catch up with Amazon over the past few years and has had very little success. Therefore, I have to wonder if Google has the capacity to pull it off. They certainly have the capitol to invest in a new shopping platform. That said, when you have an organization like Amazon whose market share and brand equity is so dominant it’s going to be an uphill battle.
AU: How would Google Shopping affect media websites that offer links to products for sale?
The lucky ones will be absorbed by Google. The unlucky ones will have to hold on as long as they can and hope that Google decides the online shopper market is too saturated by Amazon and Walmart to make a sustained move into the space.
AU: Would the customer be affected?
Not really. There are typically two types of online shoppers. The first goes straight to Amazon and searches for the product they are looking for. The second goes straight to Google to search for information on the product they are looking for. Inevitably they both end up buying the product (or not) from one of the affiliate companies anyway.
AU: How could current websites, which offer ad links to products, compete with Google Shopping?
I doubt they’ll be able to due to the scale at which Google, Amazon and Walmart operate.
BA: What are these “third-party” websites?
By third-party websites we are talking about affiliate websites — people who have their own website or have links to Amazon or eBay, and they basically get a percentage of the sales. Amazon Associates and eBay Partner Network are two of the big ones that control their own affiliate marketing. ShareASale is one of the better affiliate websites. They just track what comes to your website and they go to Amazon or eBay or Google Shopping, and when a consumer makes a purchase — it doesn’t even have to be what they initially looked at — they get a percentage of the sale. I would foresee Google Shopping creating their own affiliate type of a program just like Amazon and eBay.
BA: How will this affect small manufacturers, craft makers, who mainly sell their goods on their own websites? One such, for example, that started in your area, in Opelika, is Loyal Stricklin, a high-end leather goods craft shop.
It depends on Google’s model, which we don’t know yet exactly what that will be. But I assume it will be similar to Amazon, a lot of things to buy that are not solely offered by Amazon, small retailers linked by Amazon. Those smaller companies may be fine and may even be helped by it. If you’re on Google you’re out there pushing for a bigger market place. And there will always be people who go directly to that retailer. People may just skip the big commerce websites and go straight to the manufacturer. So I don’t see a whole lot of negative in it for them.
BA: How will it affect small retail shops with that have their own websites as well, such as the popular dress shop, in Auburn, Behind the Glass?
Probably not to a great extent. Some recent research has shown that more than 80 percent of consumers actually opt to go to a physical store — including millennials and even younger people. They still want to go into a store and touch and feel the merchandise. And if they can reach more online, it’s probably a bonus for them.
BA: How has online shopping affected how marketing is taught at Auburn?
I don’t think we are changing too much how we are preparing students. Basically, it’s introducing them to some of the newer techniques that affiliate marketing introduces and what the effects that can have on a business. At the end of the day, a lot of the traditional marketing skills that we have taught for years are still holding true in this type of economy that we have.
BA: Some critics say that is unfair monopolistic activity for a giant like Google to leverage its enterprise into a new field. The European Union has imposed regulatory fines on Google, including fines on shopping activities.
I don’t know. The way I look at it, if Google gets into this space, it just adds more competition. They are coming in to compete with Amazon and Walmart and eBay. Amazon is the 300-pound gorilla, and Walmart is trying to compete and has not been that successful, and maybe Google can be and level the playing field some. I don’t know if Google can even pull this off. They’ve got plenty of money to give it a go, but if they do succeed, they will definitely have to link to some of these smaller retailers, as well as the big box stores.
Dr. Brian Bourdeau is an associate professor of marketing in Auburn University’s Harbert College of Business. His research has appeared in Strategic Management Journal, Journal of Service Research, Journal of Services Marketing, Journal of Non-Profit & Public Sector Marketing, International Journal of Sports Marketing and Sponsorship and International Review of Business Research Papers. He won Harbert College’s Excellence in Outreach Award in 2018.