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Google Makes Its Play at Product Search and Amazon with Shopping Actions

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For years, Google has recognized three mounting trends in search: (1) local-focused mobile searches; (2) voice-driven searches; and (3) retail purchases starting and/or ending on Amazon. Addressing these trends, Google recently stated in a blog post: “it’s clear people want helpful, personal, and frictionless interactions that allow them to shop wherever and however they want … put simply, they want an easier way to get their shopping tasks done.” Despite Google having foundational pieces in place to do this – its expansive Search Network, emerging voice technology in Google Assistant, and the Express marketplace – it lacked a common thread to pull it all together into a streamlined, competitive force.  That is, until now.

This month Google introduced Shopping Actions, its new program built on Express that enables “easy” shopping through Search or Google Assistant.  The update comes with an array of features for consumers: voice-activated product search, a universal cart across Google properties, shareable lists, instant checkout, 1-click re-ordering, personalized recommendations, plus more.  Shopping Actions is available on mobile, desktop, and Google Home devices, and will populate listings within Express, Assistant, and Google.com sponsored Shopping units. Merchant fees are based on a commission model with brands paying only when a sale actually happens. This update also marks the end of the ‘Purchases on Google’ (“POG”) program.

This is a big bet for Google – Shopping Actions marks an investment in the future of distributed commerce and voice shopping as means to disrupt the Amazon-first retail market. Google believes Shopping Actions not only addresses the current shopping trends, but also gets it “closer to the consumer” by giving more – access, selection, convenience, and speed. Merchants need to pay attention – although the immediate sales opportunity via Express may be small, future potential is huge.  If Google gets more adoption and smartly leverages its own network and tools, Shopping Actions could be the front-end of something big.

This is what marketers and merchants need to know:

The foundation of Shopping Actions is Google Express

The announcement does not explicitly say it, but Google Express partnership is a central requirement.  Merchants should know this is not a turnkey setup if not already on the platform.  To be eligible, sellers must pass trust, safety, and data-quality tests, as well as abide by Google’s delivery and return policies.  Express also requires back-end API integration in which a merchant’s order management system connects directly to exchange product and order information.  In other words, this is not as simple as sharing feeds from Google Merchant Center.  If a seller can clear these technical hurdles, only then is Shopping Actions in play.

Shopping Actions is a maneuver to compete with Amazon 

Despite Google having better “reach” and recently taking back share, Amazon still wins at least half of all product searches. Google’s challenge is the imbalanced experience of search listings – its mechanism for surfacing products.  Although Google delivers plentiful results, it cannot control the shopping experience after the click – retailers’ site load speed, page content, checkout process, customer service, etc. – all factors that make or break a shopper’s experience. This is where Amazon’s “walled garden” wins.

Shopping Actions addresses that friction via the controlled and consistent environment of Express – from search, to listing, to checkout.  Its new features put Express on a similar experiential footing as Amazon, but are largely a catch-up. For Google to gain an advantage, it needs to leverage its own differentiators – ad distribution across Google properties, lower seller fees, image search, private label/exclusive products, etc. – to spur merchant and user adoption.

Shopping Actions’ voice features push Google farther into the ‘Age of Assistance’

Shopping Actions is not introducing voice to product Search – Google Assistant has and will continue providing suggestions via Express – but it does add new considerations.  On top of the basic voice strategy – be seen, be smart, and be speedy – merchants need to test and study Express’ ranking algorithm to understand factors that influence product selection.  They should also consider how well their descriptions and images influence ‘voice in – visual out’ experiences.  This is already present for Amazon Alexa, and we expect Google will have a similar (or potentially better) voice + visual shopping experience with the introduction of Lenovo and Sony smart displays in the coming months.  Express retailers should also complement their listings in ways that maximize information and incentivize buyers – including rich product-reviews or promotional offers.

Voice-shopping is imperfect and clunky now, but it’s going to improve quickly as machine learning solves the flow of dialogue, product options/details, and visual displays. 360i’s proprietary VSM software is designed to help marketers find their ownable space in Voice. VSM can be used to monitor consumer purchase intent that starts with “purchase”, “buy” or “order” and catalogue voice agent responses, acquiring a better understanding of patterns in response data to reverse engineer the algorithm behind Google Shopping Express and ultimately define best practices for merchants. If retailers want ensure discoverability, curated inventory, and a positive shopping experience in this new medium, they should start strategizing now.

The Search opportunity (and challenge) with this update is discoverability, not paid ads

Shopping Actions will also appear within the sponsored Shopping Unit for Google Search (i.e. “PLAs”).  Specifically, the first two carousel positions are reserved for eligible Express products.  These are different from regular PLAs: they are not paid ads, clicks lead to Express (not e-com sites), and merchants are charged only if a purchase is made.  Google is essentially carving out a piece of paid ad real estate for the commission-based Shopping Actions.

On one hand, the Sponsored Shopping unit is a great place to create traction for Express because so many users click there.  As of Q1 2018, PLAs drive 76% of retail search ad spend in the US.  On the other, there is risk in sacrificing such valuable ad space for an unproven program.  It remains to be seen if shoppers clicking over to Express will convert enough to backfill lost ad revenue.  The combo-listings may also create user confusion as some listings go to Express and others to e-com sites (although Google is addressing with “badges” for Shopping Actions listings).

The main consideration for retailers is maintaining presence in Google’s evolving Search environment.   Merchants already on Express are fine – their relevant products will surface on both Shopping Actions and PLAs.  But others need to make a decision: opt in and maintain Shopping coverage (taking on full scope of Express offering), or sacrifice share and make up for it with adapted PLA strategies.  We expect Shopping Actions will have minimal impact on PLA performance in near term, but it could progress as Express grows and fuels Shopping competition.

 

Shopping Actions is now available and interested merchants can sign up here.  Setup may not be simple, but we do believe this is a worthwhile, long-term consideration.  Google is investing a lot in this program and adoption will inevitably pick up.  Retailers should keep a close eye on their own product distribution and performance in the coming months and weigh their options for a future that’s now here.