Googazon Could Take Over Web 2.0

Consumerization of IT could completely reshape the online retail industry, risking the creation of a dominant retail intermediary—call it “Googazon”—said Gartner analyst Hung LeHong Oct. 10 in a presentation at the companys annual Symposium/ITxpo here.

As the Web evolves into a collection of consumer–centric Web services, one or two huge players could come to dominate retail search, said LeHong.

“Its a scary scenario. A few major players could take over Web 2.0,” said LeHong, suggesting that a merged entity such as a combined Google and Amazon.com could dominate as a “pretailer,” a product search and price comparison portal.

“Googazon will sit between your customers and your company. It will be able to provide access to all retailers,” LeHong said. “It will close 30 percent of transactions and guide 50 percent of purchases in any channel. It will force full retail transparency and will dictate how we compete. [By 2016,] you will need to work with Googazon.”

The danger, however, is that Googazon could become a dominant market force, not unlike Wal-Mart Stores in conventional retailing today. The marketing muscle that such a company could exert on buyers and sellers could limit consumer and vendor choices, LeHong suggested.

This retail transparency follows the same pattern of Internet users trusting strangers on eBay, thanks to the transparency of the user experience and recommendations of fellow customers believed to be genuine, said Gartner analyst Tom Austin. In contrast, Austin said, “Customers dont believe big corporations anymore. People gather their own information and make up their own minds.”

Googazon could help consumers by finding deals and matching them to a buyers financial profile, Austin said. To counteract the retail transparency that Googazon might bring about, Austin said retailers might try to change prices frequently, create complex packages that resist comparison or create customer loyalty programs.