Google Checkout struggles against etailer resistance

Posted 22 August 2006 11:47am by Linus Gregoriadis with 1 comment

Retailers are continuing to turn their backs on Google Checkout because of fears that they will be relinquishing ownership of their customers to the search giant, according to research published by the analyst house Piper Jaffray. 

An overwhelming 81% of 30 online retailers surveyed at the 15th Annual eTail Conference in Philadelphia indicated that they “will probably not implement Google Checkout primarily due to concern about ceding customer ownership to Google”.

As we reported earlier in the summer, Google's rival to PayPal allows consumers who are registered with the service to make purchases by clicking on the icon which merchants can display on their websites and on their Google ads.

But it is clear that there are problems persuading etailers that there are compelling benefits from Google Checkout even though merchants can use it to process sales for free by spending a certain amount on AdWords.

According to the research, some merchants are worried about “the perception that Checkout provides Google with too much visibility into their business, especially relating to Google search driven conversion rates”.
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This quote is taken from Brian Smith’s blog, Comparisonengines.com, which has excerpts from the research note written by Piper Jaffray’s Safa Rashtchy.

This is not the first setback for Google’s service as it suffers from some early teething problems. eBay, which owns PayPal, has unsurprisingly decided not to include Google Checkout as an accepted payment mechanism.

In another setback, Levi Strauss & Co stopped using Checkout on its main website last week, according to MarketWatch.

Google is continuing to make improvements to Checkout  in response to feedback about its new service. 

But the jury will be out for a long time over whether Checkout proves to be a succesful way of underpinning its AdWords business and bolstering its position at the centre of the e-commerce world or an expensive mistake which alienates etailers and consumers alike.