Google Reportedly Launching a Buy Button: What This Means for Online Sellers

May 18, 2015

Digital Marketing David Spitz By David Spitz

A lot of jaws dropped in the world of e-commerce over the weekend when The Wall Street Journal scooped the possibility that Google was going to be launching a “buy” button on mobile product ads in the next few weeks. Although the WSJ hinted at this possibility late last year, its latest article implied that it was happening faster than many expected.

WSJ ArticleSo what does this mean for retailers and brands? At ChannelAdvisor, we think this could be big news — one of the biggest disruptions since Google launched Product Listing Ads (PLAs) — and something all retailers and brands need to watch closely. Our experience shows that early adopters of PLAs gained an early and sustainable lead, and we think this change has the potential to further separate the leaders from the laggards.

The reality is that consumers are rapidly migrating to mobile devices. In the e-commerce world, this mobile leaders and laggardsis creating whole new classes of winners and losers faster than you can say “cart abandonment.” Point in fact: Google recently announced that mobile searches have surpassed desktop searches in the US, Japan and eight other countries.

So while consumers are frequently driving in more than 50% of retail site traffic from phones and tablets, the mobile experience has lagged painfully behind. Anyone who’s had to log in to a retail site that’s not mobile-optimized and squint while trying to type in a credit card number or shipping address knows this firsthand (and probably gave up trying). This is the primary reason that conversion rates on mobile devices for retail sites are a fraction of desktop conversion rates.

The fact is, on mobile devices, identity matters. It’s crucial to a good consumer experience. Google is one of a small handful of companies with the reach to solve the identity challenge at scale for mobile consumers.

So it makes a ton of sense to us at ChannelAdvisor that Google may be launching its own version of a marketplace by way of a buy button — think of it as a “transactional ad unit.” In fact, given Google’s assets — from Android to Google Wallet to PLAs and everything in between — it’s actually a bit of a surprise to us that this hasn’t happened sooner.

Online sales conversion rates
*Source: Monetate

Our very own Scot Wingo has been saying for years that for Google to truly compete with Amazon in e-commerce, it would need to build a marketplace (and that marketplaces are eating the world). At our recent Catalyst conference, Scot also noted that Google is behind on mobile because smartphone conversion rates are so low (less than half those on tablets and desktops), since the buying experience on mobile phones is so difficult. Consumers are responding by favoring dedicated mobile apps from Amazon, eBay and upstarts like Wish and Spring.

Google has been taking steps toward a better mobile experience for a while, through the prominence of the highly visual PLAs on mobile, Enhanced Campaigns, product reviews and promotions on PLAs, Mobilegeddon and more. We see this as a natural progression that’s great for consumers and
retailers alike — one of those rare win-win-win scenarios that should benefit everyone.

Google PLAWhy should retailers be ready, if not downright excited, by this?

Let’s start with some of the details that have been reported by the WSJ:

  1. The buy button will appear only on mobile phones (and currently only to a small percentage of mobile traffic).
  2. It’s currently available only in the US.
  3. Shoppers will input their credit card information with Google once, or can use a variety of digital payment methods (Google hasn’t clarified which ones yet).
  4. Shoppers will have the option to choose different colors, sizes and shipping options.
  5. Shoppers will have their email and address information shared with retailers, if they opt in. (This is important.)
  6. The program will continue to be advertising-based, instead of commission-based, which is substantially different from Amazon, eBay, and other marketplaces.

 

consumersAll this means that retailers that want to participate may have to give up some control over the purchase experience. The
WSJ reported that some retailers are concerned that they won’t “own” the consumer. But let’s be clear, folks: In today’s hyper-transparent, transactional world, the consumer owns the consumer.

Your job as a retailer is to provide great products at reasonable prices with outstanding service, not drive away 9 out of 10 consumers who gave up on inputting all of their information. In the <1% conversion rate world that is today’s mobile commerce, no one really owns the consumer and you’re losing share to more streamlined purchase paths like Amazon.

Today’s consumers choose where to buy something based on convenience, lack of friction, value and selection. Make it hard enough to buy, and they’ll go somewhere else. We think Google could be making mobile shopping a whole lot easier for consumers — and that’s good.

How should retailers prepare?

Over the years, we’ve watched the natural evolution of search-related commerce go from SEO (when organic search results ruled the world) to SEM (when bidding and keyword management were the rage) to PLAs (where a solid handle on data feeds and product attributes won the day) to this new world where you’ll need all of the above plus robust and scalable inventory and an order integration platform. (You don’t want to be selling products via Google’s buy button if you’re out of stock, right?)

And getting consumers accurate attribution/variation data is all the more critical in a “transactional ad unit” because they’re buying something, not just clicking on an ad. Point is, you need a real platform to make this work, not some internal IT skunkworks project that’s going to ruin your customers’ experience. This isn’t just about tracking — it’s about inventory and orders.

The bottom line

Our verdict? This development could be huge for retailers, and those that get on the bus early are likely to widen the competitive gap between themselves and their competitors. We strongly encourage retailers to prepare now. As always, our mission at ChannelAdvisor is to help our customers “future-proof” their businesses by worrying about developments like this so you don’t have to. If and when this becomes a reality, you can be sure we’ll be there, ready to help you succeed.

We’ll continue to keep an eye on this news — subscribe to the blog so you don’t miss any updates. We’re always working with the leading channels in the market and are available to answer questions about this development. Reach out at info@channeladvisor.com.

 

Blog post by David Spitz, ChannelAdvisor CEO