The developing world of online industry has long since left kindergarten behind, but it’s still young. Welcome to the jostling schoolyard of the internet, writes Chris Morley.
Recent shifts in the virtual environment of the internet have added to the complexity of the digital landscape. Combining digital marketing with catalogue sales and retail practices was never going to be a simple process, but in times like these the judicious use of apt analogy can go a long way to bring clarity.
Imagine the online space was your average primary school playground (or grade school playground, for any US readers).
In this hypothetical space, filled with a riot of competing voices, colours and the clutter of broken toys, there are three major factions that dominate. It’s only natural that something like this should happen; with large populations and broad horizons, there will always be forces competing for the lion’s share of fame, wealth and opportunity. In this particular analogy, however, the three dominant gangs are:
- The Social Group – These groovy hipsters are across all the latest and greatest forms of communication that the internet has caused to begin proliferating at a wild rate. Communication is all-important for the Social group.
- The Search Group – Hard-working and generally less noisy than the Socials, this group is more interested in the maths and mechanics behind the internet. Data and analytics mean everything to the Search group.
- The E-Commerce Group – From the travelling merchant stock of yore, these sellers, retailers, wheelers and dealers are keenly interested in the work of both the Search and Social groups, yet they care for only one thing: conversions.
It isn’t hard to imagine where you might find each of these groups within this fantasy schoolyard. The Search crowd barely ever leaves the classroom due to their love of whiteboards, E-Commerce types can be found in the cafeteria (buying sausage rolls in bulk and reselling them to younger kids), while Social… they’re over behind the shelter shed – socialising.
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Alright, so we have an analogy (a little colourful perhaps, but that just helps make the point). The interesting thing is that recent news shows just how much each of these little cliques have begun to incur into each others’ territories. Google, as viewed as master and commander of the Search group, is currently working hard on offerings like Google Shopping, Google Wallet and the Android operating system. While all of these have been riding on the coattails of Google’s Search and Advertising business, there’s no doubt that they collectively position this tech giant as a veritable E-Commerce contender.
In Australia at least, E-Commerce can probably be best represented by eBay (and perhaps soon to be Amazon, or even Alibaba). Only yesterday eBay announced the news that it was reshaping its comparison shopping engine, Shopping.com, into a full-fledged advertising network, eBay Commerce Network. Sounds very Google-y, doesn’t it?
At the same time, the folk over in Social (led by Facebook, with a significant margin) are pushing as hard as they can to diversify and find a profitable future for themselves. There isn’t much money in letting people communicate for free – but there just might be a way to leverage their personal information for search and advertising purposes. That data, in theory, can also be used to inform online retailers how best to find and market to their target consumers. Now all that’s left is to find a way to make social commerce work for everyone involved.
What these three forces are trying to achieve is greater control over the entire field of play, meaning more freedom, money and safety. The virtual world is a volatile place for businesses, and it’s already witnessed at least one significant boom and bust cycle in just the first couple of decades of its existence. Thus far Google has appeared the most aggressive in trying to corner chunks the other groups’ markets, realising varying levels of success with initiatives like Google+ in the social space, for another example. This business’s ability to dovetail its various offerings (and offer many of them for free, initially) makes it most likely to remain in a dominant position for the foreseeable future.
eBay, on the other hand, seemed intent on shoring up its E-Commerce offering right up until the recent news regarding the eBay Commerce Network (although, it can also be argued their ‘best match’ search technology is a competitive search offering). Meanwhile, Facebook’s recent acquisition of Instagram has added further power to The Social Network’s E-Commerce punch, but even that hasn’t led to any significant gain in that direction. Perhaps only the development and release of a rumoured mobile operating system on a specially-designed HTC smartphone will be enough to secure Facebook’s mid-term viability.
Just a few years ago everyone seemed to be spruiking the potential of Social to take over the world, but so far it’s been an uninspiring show – climaxing with Facebook’s IPO and subsequently tailing off in tandem with that company’s share prices. The solid E-Commerce offerings have had perhaps the most stable run, even if local brands live in constant fear that Amazon will one day rear its ugly head in our neighbourhood. Having said this, there is also a large majority of Australian retailers that are yet to get fully up and running online, and as more international players close in on the local consumers, the future of these businesses is called into question.
Ultimately, it’s Google that is currently ‘winning the internet’ and there’s a good chance it will maintain its top-dog position for some time. With futuristic offerings like Google Glass potentially representing the hardware platform of the future, the company will be able to own the entire digital experience from beginning to end. Especially if it manages to roll out Google Shopping Express throughout Australia’s major cities.