Amazon in the crosshairs: Google ecommerce updates explained
Google is rolling out updates to its product search pages — a move that could both improve the shopping experience and help the search engine secure more ad dollars in the ecommerce space. As Amazon’s ad revenue growth rate outpaces Google’s and ecommerce gains steam, Google sees a critical opportunity.
Google's decision to retool its ecommerce business could help it win over ad dollars from Amazon
Google’s parent company Alphabet today announced that it will be retooling the look and feel of the tech giant's product search pages. In the new interface, product images will feature more prominently — an attempt to shift away from text-heavy search results and to create the feel of a virtual store.
The move is designed to improve the user experience for online shoppers. “The last year has shown us that while shoppers have increasingly turned to digital for their shopping needs, they miss the in-person browsing experience. Digital has increasingly become a place where people look for inspiration and ideas, it’s no longer just a destination for a quick transaction,” Matt Madrigal, vice president of merchant shopping at Google tells The Drum. “We believe there’s a need for a more visual and browseable shopping experience online that’s also actionable — one that not only shows product imagery, but marries that with helpful content. The new shopping experience helps users discover a wide range of products, brands and helpful content in a highly-visual, inspirational manner — right from search.”
And while the decision could improve the shopping experience, it may also be a bid to win over more ad sales in the ecommerce space as Google attempts to compete with Amazon, the ecommerce category’s definitive leader, and other major players such as Alibaba, Walmart and Target.
Today, 53% of US searches for consumer goods begin on Amazon. And advertisers are increasingly taking note — they're shifting dollars to Amazon, enabling the ecommerce platform to secure about a fifth of all search ad sales, per eMarketer data.
More broadly, Amazon is seeing a higher growth rate from its ad business than Google; the ecommerce giant's “Other” category — which is thought to largely comprise ad sales — saw an 87% year-over-year increase in sales, per Q2 data. Google’s numbers, while still climbing steadily, are not quite as impressive; year-over-year ad revenues were up 69%. Changes to Google's ecommerce offerings like those announced today could help the company increase its ad revenue.
According to reporting by the Wall Street Journal, former Google executives shared that, within the walls of the company, revamping ecommerce is a major priority. The same source indicated to the Journal that the company’s ecommerce business is constantly changing; it’s seen five different leaders in the short span of a decade and it has overhauled its digital shopping strategy a minimum of four times in the last two decades.
From its humble beginnings with consumer product comparison platform Froogle, launched in the early 2000s, to the dedicated “Shopping” tab, to partnerships with the likes of Shopify designed to simplify the merchant experience, the search engine’s ecommerce business has already witnessed many evolutions.
Some experts say that Google is also behind the curve when it comes to shipping and logistics, as it’s become increasingly difficult to compete with Amazon’s seemingly bulletproof Fulfillment by Amazon (FBA) infrastructure. FBA, of course, promises shoppers free single- and two-day shipping on countless products — putting other platforms, including Google, at a disadvantage.
“Google may provide a best-in-class user experience for searching for relevant products its consumers want to buy, but they also need to partner with or buy logistics providers to help them offer logistics for it's sellers,” says entrepreneur and Amazon expert Jason Boyce. “Amazon's FBA program allows small businesses to grow without the headaches of building their own fulfillment and delivery networks. Any marketplace that fails to build this capability will continue to trail Amazon. Consumers now believe that fast delivery is a God-given right and without it, marketplaces will fail.”
On the flip side, the fact that Google works with direct-to-consumer companies outside of the closed ecosystem of Amazon’s fulfillment services could appeal to brands looking to break free of the limitations that exist when operating solely within the Amazon ecosystem.
Still, some experts caution brands against depending too heavily on any of the large tech players. “Everyone needs a credible alternative to Amazon,” says Raj De Datta, cofounder and chief executive at Bloomreach, a digital experience platform for ecommerce players. “[But] brands and retailers need to invest in their own digital environments to acquire and nurture customers. Being dependent on Amazon or Google for all of their traffic is a recipe for customer acquisition costs spiraling."
Considering that US ecommerce sales are expected to jump nearly 18% this year alone, it’s likely that Google will continue to invest in the development of its ecommerce business. Plus, as Apple’s privacy-centric but advertiser-hostile changes catalyze a marketing exodus from Facebook, Google could be well-positioned to seize on shifting ad dollars.