Alphabet Inc.’s Google has taken multiple stabs at online commerce, with limited success. The company has mostly preferred to sell ads that send people to other digital stores, rather than selling products itself.
However, the pandemic has hammered marketing budgets, particularly in the travel and physical retail sectors that are major Google advertisers. Meanwhile, e-commerce has boomed as people stay home and order more products online. That’s left Google watching from the sidelines as rivals such as Facebook Inc. and its Instagram app become hotbeds of online shopping. Amazon, the U.S. e-commerce Goliath, has seen sales soar, while Google suffered its first ever revenue decline in the second quarter.
A recent RBC Capital survey of marketers revealed “social commerce” as a hot area that is “especially bullish” for Facebook and Pinterest Inc., a digital search and scrapbooking company. After Facebook boss Mark Zuckerberg unveiled an updated Shops feature for retailers in May, the company’s stock jumped. Google doesn’t want to miss out.
For months now, Google executives have signaled that YouTube will be central to their e-commerce strategy.
On a recent earnings call, CEO Sundar Pichai suggested YouTube’s sea of popular product “unboxing” videos could be turned into a shopping opportunity. The video site is full of other popular categories, such as makeup and cooking tutorials, where creators tout commercial products on air.
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