Google is Changing the Face of eCommerce
Announcing, ‘Purchases On Google’
Google have announce that Purchases on Google, which they hope will rival Amazon’s monopoly on eCommerce, has entered into beta testing. As Amazon grossed $136 billion in sales last year, it is unsurprising that Google want a bigger piece of the market share.
Though there has not been a formal announcement as yet, there has been talk of a Google ‘buy’ button since July 2015. More recently the Purchases on Google function has appeared in their Merchant Center with the explanation that it will, “Help shoppers easily purchase on Google, so you can grow conversions and drive new customers.”
Merchants who qualify for the program will benefit from placing a call-to-action in the Google search engine results page, which obviously spells bad news for other online marketplaces such as Amazon and eBay Inc.
Currently Purchases on Google is only available on mobile devices, a move that Google has made in response to the surge in smart phone usage. Searches on mobile devices now outnumber those on personal computers in 10 countries, including the U.S. and Japan, and for Google, the smaller screens on mobile devices mean that there is less ad space.
Google’s ‘Buy Now’ Button Will be a Game Changer eCommerce
Google’s income is made through advertising, but due to the impracticality of advertising on a small screen, mobile ads fetch lower prices than those on desktop computers (as they typically lead to fewer sales). Purchases on Google provides a way around this issue, and has been introduced as a way to capitalise on the ever-increasing activity on mobile devices.
The issue of the small screen was resolved by creating mobile apps, like those from Amazon, eBay and others, which provided customers with a way to quickly and easily make online purchases. Apps have meant that users do not have to navigate websites on a small format, as well as eliminating the need to repeatedly enter credit card and shipping information.
This has provided convenience for the user, but it has meant reduced numbers of lucrative product searches for Google to run ads alongside. Purchases on Google, and the forthcoming ‘Buy’ button, are intended to reduce friction for users on mobile devices, which in turn increases sales, or conversions, from digital adverts.
Merchants who participate in the program will be able to display a ‘Buy on Google’ button on top of their product ads. Currently ‘Buy on Google’ is restricted to mobile devices running Google’s operating system. Customers with an Android device and Google Wallet, benefit from a shortcut in the purchasing process when they click ‘Buy on Google’ as they are directed straight to a Google-hosted landing page.
“It’s early days, but we’re seeing a nearly 50% increase in conversion rate on our mobile Shopping ads with Purchases on Google and a 25% decrease in our cost per conversion for UGG.“
John Kalinich, Senior Vice President, Global Digital Commerce at Deckers Brands
Products purchased through ‘Buy on Google’ will still be provided and sold by the retailer, not Google. However, this still marks a profound change in Google’s role, turning it into something closer to an online transactional business rather than simply a provider of links to information that is held elsewhere.
There have been concerns from retailers that these changes will weaken their relationships with customers, worrying that Purchases on Google will make the role of the retailer that of a back-end supplier.
In a bid to get retailers on board, Purchases on Google will have an ‘opt in’ for customers that would show the same marketing that they would have been exposed to had they made the purchase through the retailers’ own website. Should the consumer decide to opt in, this would also include the benefit to the retailer of receiving the address information and email addresses for their future marketing.
Google’s product pages, where the purchases will be handled, will also be heavily branded in line with the retailers selling the items, and any recommendations for other items will only be from that merchant.
However, users of ‘Buy on Google’ will only enter payment details once, and Google will store and automatically re-load them for any future purchases on its pages. Google will not share these payment details with the retailers, as Google will pay the retailer after it has received the payment from the shopper.
Unlike Amazon and eBay, Google will not take a cut of the sales price for the items sold, instead, it will be paid by the retailer in a way that is similar to its existing advertising model. Google will advertise to shoppers that items are available to ‘Buy on Google’, and when shoppers subsequently click through to the product page, the retailer is charged (based on those clicks).
It is thought that the ‘Buy on Google’ function will appeal to people who enjoy comparison shopping, as it will return a multitude of products from all across the internet, with each available with a click of a button. Purchases on Google offers the consumer the convenience of one-stop shopping whilst also enabling easy price-comparison.
Large retailers will likely welcome the convenience of ‘Buy on Google’ as they are already among the largest spenders on Google’s search ads, according to a study by Ad Age and AdGooroo. Large retailers have mostly avoided working with Amazon because companies don’t want to lose the valuable customer information that they gain through their own websites, and they have been keen to avoid the price competition of Amazon. Purchases on Google seems to be addressing these issues which may win them the backing of the large retailers.
It seems inevitable that Purchases on Google will be a success; Google is a trusted brand that is used by countless people on a daily basis. Google has also already made changes that improve the ease with which customers can purchase items through their search engine results pages, making their ‘Buy’ button simply seem like the next logical step.