Google Inc. plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Inc.

Google has approached retailers about creating a “buy” button for its online shopping site that would be similar to Amazon’s popular “one-click ordering” feature, according to people familiar with the discussions.

Until now, Google Shopping has referred shoppers to merchants’ websites via links in search results. But Google wants to keep users on its own pages longer, rather than send them elsewhere.

Google wouldn’t sell or ship products itself. It aims to streamline shopping for Internet users so they keep searching for products on Google instead of switching to Amazon. The move comes as Amazon has bolstered efforts to snag a slice of Google’s search-advertising business.

Separately, Google is considering a marketing program that would allow merchants to promote two-day shipping for products purchased through its shopping service, according to a person who has been briefed on the plan. The program would resemble ShopRunner Inc., which offers unlimited two-day shipping from retailers including Neiman Marcus Group Inc. and Toys “R” Us Inc. for a $79 (€64 approx.) annual fee.

The people familiar with the matter said the discussions are preliminary and Google might not go ahead with either plan. Several retailers Google approached were cool to the “buy” button, because they fear price competition in an online bazaar and don’t want to lose control over the image they present to shoppers.

A Google spokeswoman said “we continuously explore and test many ideas for improving the experience for consumers. We don’t have anything to announce.”

If Google goes ahead, it would be the search giant’s latest moves to combat Amazon’s increasing sway over online commerce. In the third quarter, 39% of U.S. online shoppers began researching their purchases on Amazon and only 11% started on search engines like Google, according to Forrester Research . That’s a reversal from 2009, when 24% started on search engines and 18% on Amazon.

Former Google employees say product searches are the most lucrative category for the company’s $50-billion-plus advertising business. Google doesn’t provide details, though Executive Chairman Eric Schmidt in October called Amazon the company’s “biggest search competitor.”

“Amazon is increasingly running away with online retail in North America, which poses a huge problem for Google,” said Jeremy Levine, an e-commerce investor at Bessemer Venture Partners. “Google has to get in front of this and create a reasonable alternative.”

Expanded use of smartphones and mobile-payment services pose another hurdle for Google. Many smartphone users bypass traditional websites, and the search engines pointing to them, in favor of apps from retailers, or Amazon.

Apple Inc. ’s new Apple Pay service, which enables one-click payments for iPhone users on many apps, could encourage users to go directly to online merchants they favor, said Faisal Masud, executive vice president of global e-commerce at Staples Inc. Google now offers Instant Buy, which lets users of its Google Wallet mobile-payment service purchase products from websites and mobile apps with as few as two clicks.

Google wants to provide more services that online shoppers have come to expect from Amazon. In November, Google users on smartphones began seeing information panels that mimic Amazon pages directly in search results, including product photos, specifications, prices and reviews. Google already displays similar panels on personal computers.

Searchers must still click to merchants’ websites to complete a purchase. Such sites often don’t have shipping and credit-card information on file, a hurdle to completing a sale.

A “buy” button would enable Google users to purchase items without leaving its pages. Users would provide shipping and credit-card information once, to Google, which would then pass the information to retailers to fulfill an order.

Facebook Inc. and Twitter Inc. said recently that they are testing their own “buy” buttons to facilitate purchases from advertisers.

One retail executive briefed by Google was told to prepare for a test of the system soon, although that is unlikely until after the holiday-season crush.

Retailers’ concerns about Google’s initiative were heightened in November when digital-marketing agency RKG spotted an unannounced Google test. Google users searching for “anthropologie,” the women’s clothing retailer owned by Urban Outfitters Inc., were also shown a link to a Google Shopping page with dozens of the retailer’s product ads. Anthropologie didn’t give its permission, according to a person familiar with the matter.

Retailers prefer traffic be directed to their own site, where they control the page and don’t have to pay Google for each click on a product listing. Search-engine marketing consultant Larry Kim wrote that Google was “stealing traffic” from a website. Urban Outfitters didn’t respond to requests for comment.

Some retailers are considering participating in Google’s shopping initiatives because they fear Amazon more. Unlike Amazon, Google doesn’t sell products itself. It has discussed allowing merchants to capture the email addresses of customers who use a Google “buy” button, according to people briefed on its plans. Amazon doesn’t share customer data like email addresses with merchants that sell via its website. An Amazon spokesman declined to comment.

Retailers also need help competing with Amazon on fast shipping. Google’s Express delivery service offers same-day delivery, but only for a limited number of products in a handful of U.S. cities. The new subscription shipping program would essentially be cooperative marketing, allowing merchants to advertise two-day delivery under Google’s familiar name. It isn’t clear how the program would work.


Source: Wall Street Journal