Google Shopping is a long delayed product that may either kill online shopping or give it the creditability that traditional retailers feel it has long lacked...
The launch of Google Shopping in more countries now including Australia makes it that much harder for online retail stores such as new startups like Appliances that seek to capitalise on the growth of consumers accepting online shopping is a faster and often cheaper solution.
The last few years have seen a growth in comparison style websites such as Get Price but also hybrid models like Appliances Online that delivery to customer direct from their warehouse or manufacturer depending on your location. Google is obviously happy that they have finally been able to launch Google Shopping into the Australian market as it’s been pending launch for over a year but the question is how will users react to it and will they even use it?
The biggest winner in the launch of Google Shopping is likely more direct sales of popular appliance brands who want to increase revenue but at the same time reduce the number of affiliates they deal with each day. For most brands one of the primary factors for wanting Google Shopping is that they can also increase their profit margins as they can now sell more products direct to consumers. Part of the general idea of Google offering a shopping portal is that the wholesalers and big chain retailers who traditionally considered online too hard can now just supply a feed and let Google do the rest, but it also places more dependence on the Google search platform to continue to grow and deliver traffic to their websites.
Search online buy instore?
It’s certain that most retailers who are listing within Google shopping will also get an uplift in offline sales as consumers will search, view products and compare prices online and then drive to their local store to pick up the products when they are ready. The reason that many visitors to Google Shopping will buy in store is that many retailers listing within Google Shopping still do not offer online ordering facilities, have a limited or outdated range of products or have such a terrible user experience that consumers avoid their website.
Having a Google Merchant feed is a great step forward for many retailers to get more online traffic but traditional retailers still need to examine why they still fail to accept online shopping as a new channel of sales. The advantage of the Google Shopping platform opening in Australia is that since Google is a dominate player in search it may encourage big retailers to move quicker to make full use of it and online shopping if they don’t want to have to depend solely on affiliates and shopping comparison websites like Getprice to be their only channels of online sales outside of Google.
Getprice likes it
Not much has been said by the other comparison websites about the Google launch in Australia but interestingly Getprice say that it’s a positive step for their industry. The reasons that David Whiteman of GetPrice states that it is a good idea is that Google Shopping re-enforces the concept of consumers buying and shopping online. My feelings are that Google will not want the product to sit still and gather dust so will likely aggressively ramp up their online and offline advertising targeting general consumers encouraging them to shop/browse online but will also expand the number of merchants using it as if they don’t move online now with Google Shopping they will go the way of the dinosaurs.
Testing Google Shopping
It’s always interesting to see how smart the algorithm is when a new product or platform is launched, how does it handle natural language and do homonyms confuse it? One point I have to make clear is that I obviously looked to pick some terms that I have seen historically Google struggle to offer a perfect result and much of the feed is dependant on retailers getting the data feed right they upload to Google Merchant center. It’s also likely that there is not enough traffic for Google Shopping to understand enough about user preferences and even a limited range of products made available via retailers so far so the platform might be a little rough as I discovered initially.
Another big area of improvement will be once Google starts bringing in social data and integrates it’s +1 platform to refine and rank the results, until that happened it would have made sense to integrate a better onsite search platform such as Sli-Systems or what ever happened to their Google Store platform?
Test 1 “Organs”
The first test used the keyword “organs” and while the category options filters include sheet music and music but a logical category to also include would be instruments.
Test 2 “Ford”
The test search result for Ford was interesting as it offered both Ford products but also related items such as scale models and remote control cars.
Test 3 “DVD”
The search for DVD was a very generic term and the first two results weren’t that bad but the third result shows a failure as the matching picture relates to security cameras and does not match the product title or my search query. The other concern is only the first result shows any product description, but both of these issues are likely linked to poorly formatted Google Merchant feeds which is something I would think Google would have sorted out by now and even automated image processing.
Test 4 “Laptops”
The test on searching for laptop was a bit of a failure with the top result being a laptop bag which is not the best result for revenue for retailers but also not the most relevant result expected.
Google Checkout overdue?
The question is now that Google Shopping has been launched what is the time frame for Google Checkout finally be ready for to be launched into the Australian market? It was rumoured back in 2007 that a launch was pending and then again in August 2009 but it’s been mostly quite on the front since then. On the 28th April 2011 they lodged their Financial Reports with ASIC but no real other announcements have been made or major changes to the company information.
Part of the delay in launching Google Checkout Australia is Google holds the licence under which it is authorised to offer Google Checkout only as a “non-cash payment product”. The company is not licensed as a bank or deposit-taking institution in Australia and does not provide banking services, so until this changes their shopping product is not going to shake up the market too much.
Product Ad Extensions are next
While it’s currently in limited release the biggest step forward for Google Shopping is when via your Google Merchant Centre you are able to feed your products directly into Google Search results via Ad Extensions. When your AdWords appear and if products linked in your Google Merchant Centre are relevant to users search query they will show images, product details and pricing under your text ads. The advantage to retailers is that they only have to pay the same cost-per-click as a standard ad but the CTR is far higher because of the visual elements. Because of the sheer potential search volume, AdWords Product Extensions are the real killer for comparison websites and provide the next big uplift in retailers marketing budgets allocating spending more money on Google AdWords and less on traditional media.
The biggest concern for comparison websites and affiliate websites would be the massive amounts of money that manufacturers and retail chains will withdraw from them and pour into Google AdWords increasing their profit margins and taking control back of their business models.
See the video on Google Ad Innovations below
Going forward for online?
While Google Shopping won’t likely affect the large appliance stores it is a perfect solution for those shopping for small appliances or quickly comparing prices before visiting a retailers bricks and mortar location, it will be interesting how retailers and comparison websites change to deal with the launch of Google Shopping. It’s likely that once Google starts promoting its Google Shopping network via it’s AdWords platform it will shake up the online retail industry.