Amazon beats Google in the eRetail search
When thinking ‘search’, you’d be forgiven for assuming that Google leads the pack. A global study has shown that consumers begin their retail related searches on Amazon first (46 per cent) followed by Google searches (34 per cent). That may seem surprising considering that Google has traditionally dominated the online product search space – that is up until a few years ago when Amazon grew exponentially and became the front runner for retail related searches. Between 2015 and 2018 Amazon grew from 46 to 54 per cent with Google declining from 54 to 46 per cent. Amazon is so popular that the site has grown 46 per cent per annum with ad spend on the site reaching $6.3 billion. These are impressive figures indeed, especially over such a short period of time.
Consumer purchasing behaviour has undoubtedly changed over the past few years with more and more people (87 per cent in 2018) beginning their product searches on a digital channel vs 71 per cent in 2017. If we look at local online behaviour here in South Africa we can absolutely see the same pattern emerging. It’s not all doom and gloom for Google though – it remains the search powerhouse with just over 1.2 trillion overall queries captured compared to Amazon’s 2.6 billion product related searches. Thirty-five per cent of Google’s searches resulted in actual transactions within five days versus a 20 per cent transaction rate from Amazon. If local brands follow the online purchase funnel, these results are not extreme in the least and can, in fact, only improve.
In the future we predict that Google Images and image-based apps will play a bigger role in product searches. We’ve also seen an increase in voice search at a global level and it’s only a matter of time before this morphs into visual shopping. What this new purchase behaviour will look like is still unclear but the capability to take a picture and get immediate product related information already exists. This is before we even look at AI and how it has the potential to change the shopping game completely.
There’s no clear indication (yet) that Amazon will reach South Africa’s shores but this is telling consumer behaviour that retailers should be cognisant of. It’s interesting to note that as an example, Takealot has been growing at a compound rate of 107 per cent over the last few years, and by all indications e-retail behaviour in South Africa is following the same kind of trend.
It’s certainly an interesting space for brands to be playing in.