POV

Exploring Google’s New E-commerce Offerings

Background

As the battle for e-commerce and e-retailer dominance intensifies among Amazon, Walmart, and other key retailers, Google’s vision for its future in retail is taking shape. Google is making a broad and multifaceted effort to bring together its e-commerce offerings for a more cohesive vision for brands, advertisers, and shoppers. The core of Google’s efforts focuses on realizing the “gatekeeper” persona that enables people to find information and shop. However, rather than pointing consumers to websites, Google aims to directly influence, facilitate, and streamline online ordering and delivery from retailers.

Google is working to consolidate its product promotion and advertising on its search engine results page (SERP) and retail properties, connect these results with fulfillment and shipping, and provide offline measurement for advertisers. Simply put, Google wants to be the dominant portal for shoppers to access existing retailers and activate their respective infrastructure. Amazon, on the other hand, has its own fulfillment direct from manufacturers and resellers while classifying many existing retailers as competition.

Core Elements of Google’s E-commerce Offerings

Google has offered Product and Shopping ads for years. By relying on product feeds from retailers (ideally sourced from local inventory data), products are surfaced directly into search results, ultimately driving online and offline sales.

However, these ad types primarily only benefit retailers, and have been limited in terms of a unified fulfillment model. Today, consumers are typically directed to the retailer’s website to buy products and have their orders shipped.

With retailer partnerships, newer ad formats, and Google Express (Google’s one-stop shopping service for everyday essentials from stores like Walmart, Costco, Target, and Walgreens), the platform begins to mesh together and create a more comprehensive e-commerce experience. Core components include:

Shopping Ads

  • Rich Product ads feature detailed information about specific products across Google Search, Shopping, and Search Partner websites such as YouTube. These feed-based ads are housed in Google’s Merchant Center and enable retailers to connect to both online and offline inventory.

Product Placement Ads (PPA)

  • A new Product ad format for Google enables manufacturers to promote their products on retail partner search results pages across desktop, mobile, and in-app. The ability for advertisers and publishers to utilize Google’s advertising platforms and data to measure effectiveness make this an incredibly promising offering.

Google Payments + Android Pay + Wallet + Purchases on Google

  • Google allows its users to store payment information, which can be used for making in-store purchases and sending money peer-to-peer. Perhaps Google’s biggest proprietary advantage is that Google Wallet can act as a single payment source in Google Express across dozens of retailers and commerce sites, ultimately removing the friction of online purchase forms to make for a simpler buying experience.

Google Express and Google Home

  • Google Express, Google’s shopping platform, pulls in products from dozens of retailers while offering simplified payment with Google Pay and (typically) free shipping on orders over $35 — all without a membership. Consumers can get products delivered from one or multiple retailers in the same order, similar to Instacart.
  • Another key advantage of shopping on Google Express is that consumers are able to preserve their loyalty programs with their respective retailers. Hence, Google is offering value to the selected retailers, helping to preserve vital retention programs.
  • Google Home is a key piece of Google Express as users can now make purchases via voice commands. With Google’s Voice Assistant, many of Google’s technologies are enabled such as voice search via Google’s search algorithm, AI and machine learning activation with Google Assistant, as well as many other Google services such as Calendar and Maps.

Google recently made news when it inked a deal with Target to make its inventory on Express available to shoppers using Google Home, joining the already committed Walmart. Specific to the Walmart partnership, existing Walmart customers can link their Walmart account to Google and receive personalized shopping results based on their online and in-store Walmart purchases.

Resolution POV

By integrating of all of these pieces, Google has created a true “one-stop shop” for consumers throughout the entire purchase funnel. From search, to research, to consideration, to purchase, consumers can have a product shipped to their door — all directly via Google. This model presents a critical opportunity for Google (as well as its users and advertisers) to close the loop on the e-commerce shopping experience. A wider range of advertisers — notably, consumer packaged goods (CPG) manufacturers — can now ensure they seamlessly appear during the research portion of the consumer journey and remain present through to purchase in the Google ecosystem.

Aggressive growth of the Google Express and PPA programs could lead to significant alterations in the Google search experience for products on the site, in-app, and via voice. The algorithm determines which brands and products to order via the Google Home assistant accounts by considering SKU popularity, rating, price, and relevancy. The more purchases a user makes through Express and PPA, the more that person’s unique preferences will influence which products are shown. Thus, product optimization will be key for Google Express retailers, as sponsored product listings on Google Express and PPAs deliver higher visibility and more clicks and conversion opportunities for sponsored SKUs. And while voice results are currently organically surfaced, we anticipate paid listings to influence Google Home search results in the near future.

Google’s latest efforts also solicit opportunities for more creative engagements with brands. Co-op dollars, a staple in B2B and travel marketing, could become a much bigger part of how search ads are bought on Google as CPGs and retailers further collaborate on Express. For CPG manufacturers who historically haven’t owned or operated e-commerce product feeds, this will help reclaim customer and sales data that has been difficult to obtain.

Summary

Google is unifying its e-commerce offerings into a more cohesive vision. The Google search experience for products will be radically altered, shifting from Shopping Ads to more integrated, sponsored product listings through Google Express and driven by voice through the Google Assistant app and Google Home.

To make the most of this new opportunity, advertisers need to adopt PPAs and optimize SKU product pages to capitalize on voice search as it becomes influenced by paid listings, which seems very likely to occur in the near future.