Less than a year after Amazon.com debuted a dedicated e-commerce site aimed at businesses, in January Google Inc. quietly entered the b2b shopping space with the launch of Google Shopping for Suppliers.
Though the site is still in beta, and currently provides results only for the electrical and electronics industries, its debut is garnering attention based on Google's dominance in the search world and its transformation into a broader IT company.
“Anytime Google, Amazon—any of the big players—jumps into any space, everybody else should be very circumspect,” said Andy Hoar, senior analyst at Forrester Research.
Although both Google and Amazon have long been involved in b2b industries in some fashion, the launch of supplier-focused sites may herald a move toward more formal b2b offerings and an effort to claim a bigger piece of the b2b e-commerce market, which Forrester projected will reach $559 billion in U.S. sales this year—more than twice the size of the consumer e-commerce market.
Meanwhile, the two companies have increasingly been butting heads in the b-to-c e-commerce space. Google last year introduced paid Product Listing Ads and last month acquired one of its Google Shopping launch partners, e-commerce company Channel Intelligence. (Google Shopping is the company's broader price-comparison site.)
Unlike AmazonSupply.com, which allows users to buy products, Google Shopping for Suppliers returns search results for products and connects users to suppliers from the U.S., China and Germany to make purchases. Suppliers that have paid $1,000 and passed a verification process appear at the top of the search results page and are labeled with a blue badge.
“We want to create a better shopping experience for our users, including those in the b2b world, where many transactions include a high level of complexity or customization,” said Clayton Jones, product manager at Google Shopping for Suppliers.
Buyer confidence is a key part of the b2b experience, and the verified supplier program addresses that issue, Jones said.
Hoar said many companies that have traditionally focused on the b-to-c market have awoken to the possibilities of the b2b space. “Amazon has done so, and I think Google has now realized that b2b customers are also b-to-c consumers, and a great many of them use Google to do their searching,” he said.
Amazon declined to comment for this story but sent background information about its service, including that it offers more than 600,000 products, free two-day shipping on eligible orders of more than $50 and a 365-day return policy.
Jones said Google expects a variety of buyers—small, midsize and large companies—will use Google Shopping for Suppliers. Because b2b deals can involve a large amount of customization in price, product or delivery methods, suppliers' goal online tends to be lead generation as opposed to transactions, he said.
Bob Barr, senior VP-lead of the North American technology services practice at Acquity Group, a brand commerce and digital marketing consultancy, said AmazonSupply.com and Google Shopping for Suppliers seem to be targeting smaller buyers with simpler needs rather than larger ones that expect services such as custom catalogs, negotiated pricing arrangements and work-flow processing. “The complexities of the b2b market are not going to get solved with the sort of simpler portals like we see here,” he said.
Barr said he doesn't expect the presence of Amazon or Google to affect big b2b distributors that offer specialized services and have the resources to step up their innovation. Smaller regional distributors, however, might feel the squeeze, he said.
Brian Walker, senior VP-strategy at hybris, a provider of e-commerce solutions, said Google Shopping for Suppliers isn't a game-changer but presents opportunities for b2b sellers. “If I were a distributor, I would not hesitate to send Google a feed and ensure my site is crawlable, which is an issue for many b2b sites today,” he said. “Discoverability on the Web is a huge opportunity for b2b.”
Meanwhile, AmazonSupply isn't yet disrupting the marketplace, but its entry into b2b e-commerce, along with Google's, should be seen as a warning shot, Walker said. “Amazon is not going anywhere,” he said. “This is a huge market opportunity for them and they are going to be just as relentless at improving the buying experience and growing the assortment here as they have been over the last decade in the retail space.”
Dan Stewart, director of e-commerce at Allied Electronics, a distributor of electronics components, said his company has been watching AmazonSupply closely but hasn't seen an impact on its business. Allied offers such services as preassembly of connector parts; has 400 salespeople in 53 branch offices across the U.S. who visit customers on site to help them source the correct products; and can integrate with customers' e-procurement systems—all of which sets it apart from AmazonSupply, he said.
That said, Allied is paying close attention to logistics as a result of Amazon's entry into the space, Stewart said. “It's one of the areas we need to remain focused on because they're extremely good at it,” he said. “We need to continue to increase our ability to get products in the hands of customers very inexpensively and very quickly.”
As for Google Shopping for Suppliers, Stewart sees it as an extension of comparison-shopping sites that already exist. “We don't view [Google Shopping for Suppliers] as a competitive threat because we see ourselves getting involved in it [as a participating distributor],” he said. “I'm not going to say it opens doors for us, but it's just how the marketplace is evolving over time.”
The growing presence of such large players could exert even more pressure on b2b e-commerce companies to include features—such as personalization, user reviews; cross- and up-sell options; flash sales; and shipping incentives—that are standard on consumer shopping sites and that business buyers are beginning to expect.
But many b2b sites have not evolved past order-entry tools, requiring customers to have a catalog in front of them, hybris' Walker said. “This is no longer going to work,” he said. “[They have to] embrace Web and mobile best practices that make it as easy as possible to buy.”
Amazon and Google, on the other hand, may also have to build out their offerings, Forrester's Hoar said, establishing trust with users and providing more content to compete with the strengths of high-touch b2b suppliers and distributors.
“The challenge for the [b2b e-commerce companies] who had a print catalog is how do you tech up your offering,” Hoar said. “The challenge for Google Shopping for Suppliers and AmazonSupply is how do you build a product that's not just a tech shell and actually has substance behind it. The two shall meet in the middle, but whoever gets there first and best will win,” he said, noting that it might be more than one company.
Asked if the company plans to add content or services to Google Shopping for Suppliers, Jones said, “Google Shopping for Suppliers is still in beta. We're concentrating on building a positive experience for buyers and suppliers alike, and will continue to do so, but have no plans to announce at this time.”