Merchants on Google Checkout: undermines our customer relationships

Google Checkout is against the best interests of merchants, and they know it.

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Google Checkout is against the best interests of merchants, I posited such upon its launch in "Google Checkout to merchants: Give us your customers, and your advertising" and warned merchants about Google's designs:

What merchant would say no to a proposition such as Google’s to 'sell more and spend less?' Those merchants who consider Google’s own financial objectives that motivate the integrated Google Checkout - AdWords scheme and those merchants who value:

  • Transparency in advertising pricing and cost
  • Advertising budgeting via published rate cards
  • Avoiding disadvantages in media placements
  • Diversification in media buys
  • Clarity in vendor pricing and motivation
  • Lowering customer acquisition costs
  • Maintaining customer relationships
  • Providing direct customer service
  • Developing customer value through CRM strategies

Merchants have indeed not heeded Google's attempts to usurp merchant customer relationships, according to research conducted by PiperJaffray and reported by Safa Rashtchy in a August 21 note.

PiperJaffray surveyed more than 30 online retailers participating in a recent ecommerce conference and found:

81%...probably will not implement Google Checkout primarily due to the concern about ceding customer ownership to Google.

Specifically, online retailers were concerned that Google limits online retailers' ability to market to customers directly...

concern about disintermediation, lack of system flexibility and the perception that Google Checkout provides too much visibility into their business, especially relating to Google search driven conversion rates.

CONCERN ABOUT CEDING CUSTOMER OWNERSHIP TO GOOGLE

online retailers were concerned that Google stores all customer information, and Google Checkout limits an online retailer's ability to directly market to a customer via e-mail...the email marketing limitations placed on online retailers who implement Google Checkout may slow the rate of adoption of Google Checkout.

CONCERN ABOUT DISINTERMEDIATION

online retailers also expressed concern that Google undermines the ability of an online retailer to directly connect with a consumer by requiring Google Checkout users to go to Google Checkout to make changes to orders and transactions instead of to the online retailer's site. This requirement once again prevents an online retailer from marketing or cross-selling to a user when they return to the site to check order status or to make changes to an order. Similarly, some online retailers did not like how a Google Checkout transaction ends with a Google Checkout page instead of on the online retailer's Web page.

In Google Checkout vs. eBay Pay Pal: Where is the competition? I discuss the underwhelming public performance of Google Checkout:

Google’s much hyped Google Checkout is not turning out to be the eBay PayPal killer that was speculated at launch less than two months ago.

Google planned on users flocking to 'Find it with Google. Buy it with Google Checkout,' but the touted 'checkout option that makes buying across the web fast and easy' does not appear to be resonating with consumers, or merchants...

From AdWords customers, to Google Checkout merchants, to would-be Google Checkout users, reports of technical problems and unsatisfactory service are surfacing.

I conclude:

It is not surprising that Google Checkout is not the eBay PayPal killer it was feared to represent; Google Checkout is not a compelling “competitor” to eBay PayPal.

eBay’s PayPal is a direct payment alternative enabling, according to PayPal: 'any individual or business with an email address to securely, easily and quickly send and receive payments online'

Google’s Checkout is a credit card gateway to make, according to Google: 'online shopping sprees faster, easier and much more fun'

UPDATE Google miscalculates with Google Checkout

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