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Can Google Shopping Actions Rescue Floundering Retailers?

When’s the last time you Googled “where can I find…” or “where can I buy...?”. Considering searches like this have increased 85% over the last two years, chances are pretty good you’ve done just that recently.

This trend hasn’t gone unnoticed by the man behind the curtain (AKA Google). Nor has the fact that 44% of voice-driven searches are for items people purchase on a weekly basis, such as home goods and groceries. And we’re just getting started.

According to Juniper Research, devices like Amazon Echo, Google Home and Apple’s HomePod will be installed in 55% of U.S. households by 2022. Additionally, according to Google and Bing, one in four searches is conducted by talking not typing, a figure comScore predicts will reach 50% by 2020.

In response to these trends, and to Amazon’s growing dominance as a shopping search engine, Google recently launched its Shopping Actions Program.

According to Daniel Alegre, Google’s President of Retail and Shopping, “We have taken a fundamentally different approach from the likes of Amazon because we see ourselves as an enabler of retail. We see ourselves as part of a solution for retailers to be able to drive better transactions...and get closer to the consumer.”

This program promises to provide a more personalized and seamless shopping experience for consumers, more effective customer targeting for brands and a platform for retailers to compete against Amazon. This is Google’s attempt to shorten the distance and reduce the friction between browsing and buying -- and make money doing so.

What is the Google Shopping Actions Program?

Retailers who participate in the Google Shopping Actions Program can list their products across Google Search, Google Express (shopping service) and Google Assistant (app for smartspeaker like Google Home). This new program has quite a few interesting features:

Seamless Shopping Across Google

With shareable lists, a universal shopping cart and instant checkout with saved payment credentials, customers can easily shop online across devices and from multiple retailers in one place. For example, you can add a skin cream from Ulta Beauty to your shopping cart via your phone and use Google Home the following day to add dish soap from Target to your cart and checkout instantly.

Voice-Driven Shopping

By participating in the program, retailers can list their products in Google Home’s search results. Consumers can easily add those items to their cart and complete the purchase, all via a voice interface.

Sponsored Posts

Since we’re talking about Google, of course, there’s an advertising play. Retailers can pay to have sponsored posts show up in the search results. According to Google, organic search results will remain unchanged -- meaning they don’t appear to be giving preference to these merchants over Amazon in the organic results.

Loyalty and Increased AOV

Retailers participating in the Shopping Actions program gain access to Google’s 1-click re-ordering, personalized recommendations, basket building and intent-based retargeting. Customers can also link their Google account to the retailer’s account (i.e. Target.com) and loyalty program (i.e. Ulta's Ultamate Rewards). These features help retailers increase Average Order Value and drive repeat purchases.

Pay-Per-Sale

Unlike the typical paid search model where brands are charged for exposure, Shopping Actions charges on a per-sale model like Amazon. The cut Google is taking and how the agreements with retailers are structured isn’t clear just yet. Stay tuned.

Shopping Actions Integration Options

Retailers have two options when participating in Google’s Shopping Actions Program -- Online and Local.

With Online, retailers ship directly from their warehouse and central shipping hubs. Google provides tools to allow retailers to sell directly to consumers and manage the product they sell through an API and product feeds.

With the Local option, orders are instead fulfilled by the retailer’s physical storefronts. Orders and shipments are managed by Google, and training is provided for store employees for the processing and packing of orders. Retailers provide local product, inventory and store information using feeds and Google My Business.

Early Adopters & Results

Walmart, Target, Costco, Home Depot, Ulta Beauty and 1-800 Flowers have all been early adopters of Google’s Shopping Actions Program. And they’re seeing results, including:

  • An increase in total conversions at a lower cost, compared to running Shopping ads alone
  • Approximately 30% average increase in basket size
  • Target reported baskets increased by nearly 20%
  • Ulta has seen their average order value (AOV) increase by 35% since 2016

Google vs. Amazon

It’s odd to consider Google in the role of “David,” taking on the “Goliath” Amazon. But that’s the case. Amazon is entrenched not only from a logistical and merchant perspective but also from an online shopper behavior perspective.

According to a survey by Kenshoo, “72% of shoppers now use Amazon to find products, with 56% indicating they usually look on Amazon first before looking at other sites.”

What this means is Google will have to break some ingrained online behaviors if they’re to be successful. And it’s not just retraining people to start their product searches on Google. They’ll also have to work for shoppers to complete their purchases there as well. According to the same survey, 51% of respondents indicated they use Amazon to find alternative ideas and compare prices even when they’ve found a product on another site. So even when they don’t start on Amazon, they’re likely to end up there at some point.

What’s more, Amazon has better control from the end-to-end of shopper experience. With Google’s approach, which they’ve described as being an “enabler of retail,” their success is largely dependent on the retailer’s ability to deliver. If the shopping experience is poor, customers are likely to go back to the familiar Amazon experience to shop for their favorite brands.

Finally, when it comes to voice-driven shopping, Google has some catching up to do. Research conducted by Voicebot.ai in December 2017 showed Amazon Echo with a 69% market share compared to Google Home’s 25%.

What Now?

As of this posting, Google is working with select retailers with a physical presence in the United States. But look for this to roll out to the masses in the near future.

It’s a bit too early to make a confident recommendation on what marketers should do with the Shopping Actions program. And until we better understand the attribution model behind the pay-per-sale model, it’s difficult to compare this program with Amazon or other Direct to Consumer options.

However, if you’re currently running shopping campaigns on Google, reach out to your contact to see if you’re eligible to participate in this program and what it might look like for you. The Quick-start Guides for Online and Local services can also give you more details on what you’ll need to do to get set up.

What we do know is that this move by Google further signifies the need for brands and retailers to get personal. Between the tools and data available to marketers, there’s no reason to be targeting consumers with generic messaging or irrelevant products. Context is king -- successful marketing is about matching the intent with the right product at the right time.

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Jen Casson

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