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Friday April 24, 2020 |Notes

Big tech & local retail and converging

Big tech companies have made some significant moves into local retail over the last month. As the traditional retail business model struggles, digital commerce continues to proliferate.

Earlier this week, Google announced that most products listing ads will be free listings. This has been offered as a paid PPC service for the last ~8 years and will help entice merchants to list products. Each merchant must upload a list of products and availability, which gives Google insight into local retail and inventory. With an expanded merchant & product database, Google can look to get shoppers before they go to Amazon.

Amazon has taken a different approach. With its share of ecommerce growing in the US, Amazon has increased PPC fees for product ads in its own results and is making moves into local retail. Yesterday, Amazon announced a feature to allow local shops to list inventory on the platform. The shops are responsible for delivering products and shoppers are given exposure to the Amazon marketplace. This follows a similar investment in India by Facebook, which partnered with Jio Stores in a $5.7 billion deal on Wednesday.

Local retailers have struggled for over the last decade and the problem has been exacerbated recently. Rather than going away entirely, there's a future where many local retailers work as partners of big tech companies to provide last mile delivery, customer service, and local community integration that eludes tech companies.

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