In the Race Between Amazon and Google, Who Will Be Victorious? Consumers are shifting from search-engine-based purchasing journeys to online marketplaces and other options.
Opinions expressed by Entrepreneur contributors are their own.
Recent data has highlighted a seismic shift occurring in the digital commerce sector. More than 60% of consumers in ecommerce markets now start their online shopping searches on Amazon, topping the percentage of those who start their purchase journeys on search engines such as Google. A realm that has profoundly evolved in just a few short years, the world of ecommerce continues to reflect not only a dynamic consumer base but also an intensely volatile global landscape.
It's easy to see that the impact of the pandemic on how the world operates has been profound and complex; this encompasses, among many factors, the transformation of online shopping into a cornerstone of regular life for consumers. Amazon has positioned itself and online marketplace commerce as an undeniable and formidable competitor to the lengthy rule of search-based consumer habits.
A majority of online purchase journeys begin with Amazon and search engines, but not all
Amazon's continued dominance throughout the online customer journey is undeniable. However, the reality is never straightforward, and there's a noticeable segment of consumers changing lanes and utilizing other retailers. Acknowledging the factors behind consumers' course corrections is critical for Amazon to sustain the competitive balance it has created in the digital commerce sector.
Roughly half of online shoppers surveyed start their purchase journeys on search engines, reflecting a highly competitive race between Amazon and Google. Disconcerting for the two tech behemoths, a significant segment of consumers now begin their product search at retailer sites, other marketplaces and brand websites.
Where Amazon truly shines, and where it doesn't
Research shows that nearly two-thirds of consumers would choose another retailer over Amazon if the competitor's price were better. However, the ecommerce giant benefits from the fact that Amazon shoppers associate the platform with low prices, although the company again raised the price for Prime membership in early 2022.
Online shoppers navigate the pathways of digital commerce, with their journeys originating at an increasingly wide range of initial touchpoints. During these moments of finding inspiration, influence is strategically prominent. Due in part to their range of products and user interface, Amazon evolved a simple transactional experience into a site where a significant portion of consumers claim they find inspiration.
Delivery services prove crucial to pandemic-era growth
Amazon has been able to capitalize on the increasing importance of delivery options for digital consumers; a significant portion of online shoppers view more convenient delivery options as a factor that would inspire them to choose another retailer. A result due in no small measure to a massive investment into developing an in-house network of planes, trucks, vans and ships, Amazon has evolved into one of the most extensive U.S. delivery services. Its logistics operation now rivals that of the United States Postal Service and UPS.
Areas of weakness or room for growth?
Several areas impede the company's growth rate, and competitors like Walmart, Netflix and Disney are vigorously striving to capitalize on them. Factors that impact the choice of where online shoppers spend their money include a better, more specialized product range, the option of visiting physical stores and attractive loyalty programs.
Customer retention involves rewarding loyalty
With the entire customer journey in mind, online retailers want to retain customers just as much as gain them. Amazon Prime is a — pun intended — prime example of the membership programs designed to keep existing customers. Supermarket loyalty programs are a great example of retailers' efforts to keep existing customers; in fact, data has shown supermarket loyalty programs are more popular overall than Amazon Prime.
A multipurpose online platform — or not?
Notably, the majority of consumers continue to view Amazon as a retailer primarily utilized to purchase products. Despite pouring massive funding into an intense effort to transform into a multiple-purpose online platform, fewer than a quarter of online shoppers consider Amazon a significant entertainment service.
Amazon faces this reality despite the billions of dollars it has invested into expanding its piece of the entertainment industry, including the $8.4 billion dollar acquisition of the MGM film and television studio in 2021. In the past few years, Amazon has pushed to acquire blockbuster movies, shelling out staggering funds: $105 million for Without Remorse starring Michael B. Jordan and based on the Tom Clancy character; $125 million for the rights to Eddie Murphy's Coming 2 America; and a whopping $200 million for the Chris Pratt-led action thriller The Tomorrow War.
Amazon is a leader in digital commerce, but consumers like to have options
Although around half of online shoppers start their purchase journeys on search engines, an equally sizable portion chooses to begin theirs on Amazon. There's no denying that the digital commerce sector is now home to a highly competitive race between Amazon and Google. Given the significant segment of consumers who begin their product search on retailer sites, other marketplaces and brand websites, these two juggernauts of commerce are wise to adapt to a customer base as dynamically fluid as the world around it.