Who will own the product search market?

Product search (or “searching for products or items one wants to buy”) continues to be a problem for consumers. In 2020, consumers are more concerned about their health and safety, and have less time and money to shop. If natural disasters, epidemics, and safety issues continue, consumers will increasingly rely on technology to help find and shop products. They will want more convenience. At the same time, businesses (particularly small businesses) are struggling with local regulations, health concerns, reduced foot traffic and using technology to bring back sales.

When shopping for products, consumers are looking for broadly three types — food, grocery and household essentials, to keep their family fed and healthy; home, clothing and electronics, to manage their work and keep kids and family entertained; and discretionary items to celebrate and enjoy life (which includes lifestyle and non-essential products).

Today, consumers use a variety of websites, apps and tools to look for what they need. Some of the popular options include:

• Google (Search, Shopping & Maps), allows consumers to search for products and compare prices across stores, and often check availability in local stores (Google research shows what customers are searching locally)
• Amazon (Prime and Prime Now), allows consumers to search their large online catalogue (which has product details, prices and reviews), compare products, and buy with fast delivery options. In addition, Prime Now also consumers to look for products in Whole Foods, and Pet Food Express stores, and Amazon Fresh.
• Instacart and Doordash, allow consumers to search hundreds of stores and restaurants across the US and check local price and availability for same day orders (though prices are often marked up, compared to the in-store prices)
• Retailers including Walmart, Target, Wayfair, Best Buy and others, allow consumers to search for inventory and prices in local stores and fulfillment centers, and place same day pickup and delivery orders
• Social media sites, including Instagram, and Tiktok, recommend products and brands (via social shopping) to users, and emerging players, like Shop (by Shopify), Haystack and others who allow consumers to find stores near them and then look for products

However, there continue to be challenges:

1. For food, grocery and household essentials, inventory and pricing continues to a problem, particularly for fast moving food and essential products in local stores. In the omni-channel world, this will be a major challenge for small and big retailers. Consumers will need better tools to check for local inventory, get smarter substitution recommendations, and compare prices and total costs of the order. Amazon, Walmart and Instacart seem to be the front-runners in this space.
2. For home, clothing and electronics products, from appliances and furniture to tvs and gaming consoles, product discovery and comparison continues to a problem. What’s the best rug to go with this sofa, which is the largest but cheap and smart tv, which socks work with my hiking shoes? Questions like these are hard to answer but discovery websites like Pinterest and category eCommerce leaders like Wayfair and Houzz are leveraging human experts and learning technologies to help consumers find what they need.
3. In the discretionary category, which primarily include lifestyle and entertainment products, recommendations (that leverage user’s taste and preferences) will continue to be important. Social media sites (Instagram, Snap, Tiktok) and lifestyle magazines (GQ, Vanity Fair, Cosmo) play an important role in bringing new brands and products to consumers.

In the home, clothing, electronics and discretionary space, I believe many category leaders will continue to exist due to the nature of those categories (buying a rug or a tv is very different from buying an evening gown) and the merchandising and logistics involved. However, I can see Amazon and Google continuing to invest in technology that helps consumers shop in these categories better directly on their platforms. They will likely use their knowledge and expertise to develop platform solutions for their partners and business customers.

The local food and groceries search, however, will become a major battleground for both tech and retail companies as it is an everyday consumer need, gives companies the opportunity to build a strong lasting relationship with customers, and capture a large share of their wallet. Amazon, Walmart, Instacart and other major retailers will continue to invest capital to improve inventory, digital experience and fulfillment services, while Doordash might grow to become a leading platform giving direct competition to Instacart. Shopify might take an important spot in the local stores and products space as it expands its footprint and attempts to play in the consumer space. Internationally, Flipkart (owned by Walmart), BigBasket and Reliance/Jio in India, and Alibaba and JD in China, will continue to invest in grocery and other categories as consumer demand rises and more retail sales move online.

The race is on. What do you think? What will 2025 look like?