Can Google Express help traditional retail level the playing field with Amazon?
The enemy of my enemy is my friend for Google and major retail partners.
Google Express has kicked off a new ad campaign called “Need anything from the store?” which promotes it as a delivery service for “all your stores in one place,” according to an Advertising Age report. The effort shows people of all ages and walks of life in the often-painful process of describing a product for a largely offscreen friend or family member who has offered to pick the items up at the store.
Among the stores offering products through Google Express are Walmart, Costco and Target. The effort aims to level the playing field with Amazon — for both the retailers and Google — offering consumers both the immediacy and choice to which they’ve grown accustomed.
For the retailers, it’s a bit of the old “enemy of my enemy is my friend” concept. Ad Age characterized the campaign and the collection of Google Express partners (37 in all) as an “anti-Amazon alliance,” which was sort of announced during Advertising Week in New York. Whole Foods is currently available on Google Express, but the Amazon-owned grocery chain probably won’t remain there over time.
Most of the retailers working with Google Express have their own e-commerce initiatives, including Walmart, Target and other major retailers, but Google Express provides them with next-day delivery. A robust omnichannel capability is critical for success, and having stores still offers an advantage. Indeed, somewhat paradoxically, the presence of physical retail stores actually helps drive e-commerce transactions.
Data also show that so-called “Centennials” or “Generation Z” actually prefer to shop in stores vs. online in larger numbers than their aging millennial brethren.
What’s very interesting in all of this is what might be called the dance of the brands. In the ad, Google is positioned as subservient to the retail brands; after all, Google isn’t “one of your stores.” However, for the initiative to succeed, Google Express needs to become a branded shopping destination that is top of mind for consumers — just like Amazon.
Google must thus walk something of a tightrope, promoting consumer awareness while not subordinating and relegating its retail partners to simple providers of commodities. The effort also raises the issue of the relationship between Google Shopping and Google Express going forward. Shopping is primarily online with offline inventory information; Express is primarily about offline stores but with e-commerce functionality. But that analysis doesn’t really provide an answer.
Despite the fact that roughly 92 percent of retail purchases happen in stores, comScore and others have been hyping the growth of e-commerce — at the expense of traditional retail — for years. As indicated, however, e-commerce and offline stores are “synergistic.”
Yet e-commerce is clearly dominated by Amazon. So much so that it’s Amazon . . . and everyone else.
According to a recent report from Slice Intelligence, Amazon drove 41 percent of online shopping in Q1 2017. In 2016, it was responsible for more than 50 percent of e-commerce sales growth.
The remaining nine sites on the Slice online top 10, including Best Buy, Target, Walmart, Macy’s and Nordstrom, each had less than 3 percent of Q1 online retail sales. In other words, the remaining retailers, most of which are traditional stores, collectively generated only a little more than what Amazon brought in on its own.
This illustrates the daunting challenge for the anti-Amazon Alliance.
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