Google’s new “trusted stores” vs Amazon marketplace’s A2Z Guarantee

Google is trying to get into the ratings game

Hmm….! Very interesting move!….. What is google really trying to do here? What are the challenges it will face?

Bigger Picture:

Google seems to be trying to enhance the product information it already has (Google Product feeds) on “all the products in the world” with transactional and customer behavioral data. In exchange for this badge, it is asking sellers to provide comprehensive data on their fulfillment process. (It  is already getting the marketing and sales process flows thru Google Analytics). Eventually they could use that data to monetise the information on which products are sold at what prices, at which shipping speeds, into which geographies, thru which shippers etc. That would also help understand the global inventory levels, supply chain depth, dependencies and latencies.  This is also an attempt to catch up with Amazon on this front which has amassed a treasure trove of intelligence. Risking a $1000 lifetime per customer for this kind of data is a “steal”   for Google. (They can always call off this program if the risk gets out of control). Note that either of these programs really don’t matter to the big brand sellers. (eg.  your shopping decisions on macys.com or target.com would not be impacted whether they have this badge or not).  It  matters mainly for the smaller, not-so-well-known-stores, in the small to medium business (SMB) segment and the long tail.

Down to the operational details:
Let us compare Google Trusted Stores with  the long established Amazon marketplace ratings and A2Z guarantee.

Amazon marketplace ratings and A2Z guarantee.

Amazon can effectively stand behind its A2Z guarantee because it has a tight control on every transaction that goes thru the amazon marketplace, notably from a financial aspect. (i.e amazon collects the money when the seller claims to ship the product, but holds it for a pre-determined period which gives enough time for the goods to reach the buyer and watch out for resultant complaints, if any). This hold period is higher for newer, unproven sellers to further manage risk with fly by night operators. Each transaction is factored into the rolling window of seller history stats that are used to display to customers as well as to algorithmically decide which seller wins the “buy box”. Amazon has a highly automated transaction risk management (strategy, processes and operations)  in place to reward good sellers and penalize errant ones and it has been refined over the years. Amazon has become such a popular destination because of its relentless bias for a great  customer experience, sometimes at the cost of the seller. I know of cases where a single negative feedback by a customer on one transaction caused dramatic changes to a seller’s experience on the marketplace.  In spite of this bias, sellers come to amazon marketplace in droves, on their knees, because of the volumes amazon created due to this customer friendly environment.  (Contrast this with ebay’s two way feedback, which on the surface, appears only fair, but in reality is not buyer friendly.)

Google Trusted stores:

Now Google is not part of the transactions on “trusted Stores”  and hence has no direct control. It can only penalize the seller with a lower stat if a transaction results in poor feedback/ complaint. It could send less traffic to that store based on these ratings so they have indirect control on sellers who want to be in for the long run.  What if the seller does not send all data to Google? Interestingly this guarantee is the only way it can ensure it gets all the data from the seller and police the quality of the customer experience. However a dispute resolution process usually needs manual intervention (inspite of high levels of automation, Amazon still has an army of  human investigators to decide on these cases). Google  has a culture similar to Amazon which is to “automate /self service” everything including customer support, so it will be interesting to watch how they will staff up to this challenge. Or perhaps they are hoping to come up with artificial intelligence algorithms to decide on disputes?

BTW, Google’s prohibited goods list seems so similar to Amazon’s!.  It is very interesting to watch Google tread into the bastion of Amazon and how this will all play out.