Google considers European retail push
Google is attempting a significant push into the European retail industry with plans to launch a service aimed at giving traditional bricks-and-mortar retailers a base from which to market and sell their goods online.
The US-based search engine company plans to develop Google Base, a product still in testing, into an online retail platform. The service would give retailers access to the hundreds of millions of Google users.
Nikesh Arora, head of Google’s European arm, said in an interview with the FT that Google wanted companies in retail – and possibly sectors such as real estate – to submit details of their goods and prices.
Google would index and package the information into a consumer-friendly search engine, giving its users a virtual supermarket across a number of retail brands.
Mr Arora said: “Google Base is going to have a huge impact on retailers,” adding that the move reflected internal research, which found many leading European retailers did not feel they were competitive enough online.
But it is unclear how companies will respond, given that many of the world’s biggest retailers – including Wal-Mart, the world’s leading retailer, Home Depot, the US home improvement company and Tesco, the UK supermarkets group – have invested millions in online operations.
Some retailers are yet to set up their own internet operations, even though consumer purchases online have soared.
One big UK retailer with no online presence said on Wednesday that Google’s retail offer would be of interest if the internet company could also arrange for distribution. This potentially huge task has raised doubts about the long-term business models of other online retailers such as Amazon.com.
Though ambitious, Google’s plan to create a broader e-commerce platform for retailers lags similar initiatives from Amazon and Ebay. UK clothing and foods group Marks and Spencer, US discounter Target and US bookseller Borders have contracted out online operations to Amazon.
Until now, Google had been vague about its ambitions for Google Base, which is structured as a collection of databases. Besides being used as a platform for retailers, industry observers who had seen the “beta” version of the product thought the service would be aimed at consumers and allow individuals to swap classified ads for free.
Google is under pressure to develop new business lines amid fears that growth in its online advertising revenue is slowing after a strong recent run.
Google’s research – based on interviews with 20 of Europe’s top retailers – reveals a high level of dissatisfaction among retail executives about their online operations.
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