Tactics to tackle the monopoly of tech giants

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A current challenge for online retailers is getting visitors to complete their purchase directly on-site, rather than via marketplaces. After Facebook and Instagram debuted their solutions, Google followed suit with a new shopping experience that aims to counter Amazon's market dominance.

The announcement of Google Shopping Actions came during this year's One to One Retail E-commerce. While Google Shopping was once only an intermediary that redirected the visitor to a product page, Shopping Actions allows a customer to make purchases from different retailers, within a shared basket, on a singular platform.

Faced with increasingly demanding consumers, these unified commerce platforms could give retailers the opportunity to offer a simple, fluid and secure shopping experience. But is it really in your interest to deploy your catalogs on these platforms?

Keep visibility and traffic on your website

With the rise of various marketplaces, namely Amazon, consumers are increasingly conducting their research using their preferred marketplace. In this sense, with Shopping Actions, Google returns to its core function - online research.

For brands, the use of these platforms could initially ensure better conversion rates as visitors will be able to purchase quickly and efficiently without having to switch sites. However, there is a significant counterpart to consider: visitors will no longer need to visit your site directly or connect to their customer account.

Another major source of competition, in terms of traffic, is the rise of social commerce, particularly with Instagram Shopping. At the end of 2018, Instagram had 1 billion monthly active users and 500 million daily active users.

Continue to collect data

Facebook has taken advantage of its ecommerce functionality in order to collect data on their user shopping habits. With this, they can refine their advertisement targeting - Facebook's main source of income.

Google, as the owner of navigation data, will also collect new customer data with Shopping Actions. Retailers will concede the data they previously collected on their ecommerce site, to what will become a primary competitor.

With less traffic on your website, and little to no data being provided by these unified trading platforms, you won't be able to shape your marketing strategy or personalize your customer experience as effectively.

Keep your margins

Many retailers have succumbed to the temptation of Instagram shopping, which allows immersive communication and shopping with ease. But we must remain wary of the growing scale of this feature, which is gradually encroaching on the margins of brands.

Although they are already enjoying significant traffic and advertising revenue, Facebook, Google and Instagram will continue to dominate with their shopping solutions. Access to the Shopping Actions program is free for retailers, but Google will be able to claim commission from each transaction made as an intermediary, that will go directly against your margin.

Personalization as a solution

Although the temptation is high, the dangers of social shopping and those of Google Shopping Actions are tangible to retailers: a drop in traffic to your website, less data collected and an impacted margin. So, how can you protect yourself?

For consumers, the advantage of using these platforms is to enjoy a greater fluidity of navigation and a comparison of similar products sold by different retailers, without the need to create a customer account for each of them. Adopting a more customer-centric approach by offering seamless and personalized online experiences will make them want to be loyal to you.

There is also growing competition between international online retailers with extensive resources and more traditional brands who rely on a omnichannel strategy. To remain competitive, develop synergies and complementarities between your physical points of sale and your ecommerce site, for example by offering click & collect services. Although ecommerce now accounts for 30 to 40% of the buying experience, the physical point of sale is still the preferred destination for consumers, so catering across multiple channels will help you differentiate as a brand.

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