Consequences for merchants
A buy-button puts Google on par with Amazon: The transaction is done by (= payment is made to) Google.
Google will collect the money and the merchant still ends up sending the package. Google will then pay the merchant after subtracting a fee (the CPA) for the sale.
In Europe, several Comparison Shopping Engines (CSE) are experimenting with this model. They are doing this out of fear for Google: They figured that Google will at some point favor their own Google Shopping results on the SERP over the listings of a CSE.
If the CSE were to become a store (by adding a buy button), they hope that their products will still make it to page 1 of the SERP. Ironically, Google is now considering the same plan.
The buy button makes life very simple for a merchant: Google will charge him a CPA for a sale so
- He knows how much a sale will cost him
- He does not have to pay any advertising money up front
- He can advertise on Google Shopping without even owning a store; just like on Amazon.
Many large European retailers are resisting this plan. They feel they are downgraded to being a drop shipper and that they do no longer control their own destiny:
- Without bidding per click, they can no longer compete more (or less) fiercely for certain products.
- Without the visit to their site, they will no longer reap the reward of having a better sales funnel and a higher conversion rate
- They will no longer ‘own’ the customer. The buyer buys from Google – not from the merchant
- Their ability to upsell goes down: “people who bought this product were also very interested in this product:”
There is also a more intangible argument that the CSE is moving in on them: Their (search) supplier is now also their competitor.
Google probably let out the news about the buy button to see what response that is getting. It will surely lead to a heated debate.
Google has entered several markets (analytics, travel) where they annihilated existing players. Merchants won’t mind sharing their lunch, but having it eaten completely is something they probably do not have in mind.
Recommended further read: A Retailer's Guide to Growth with Google Shopping Actions