Maybe Google needs increased revenue to equip their Silicon Valley headquarters with more nap pods, build a new gym, or to start an organic farm on-site for employees? Or, maybe they’re just trying to level the online marketplace playing field? The answer is actually the latter, as the search engine giant has joined forces with several retailers to increase the likelihood that consumers who search for a product they carry, will in fact buy it from them instead of Amazon. In this effort, they will also make a pretty penny for the retailer as well as themselves, according to Reuters.
Turns out, this new alliance is intended to sway customers’ purchasing decisions, but also enable retailers to challenge Amazon. Some of these retailers include Walmart, Costco, Target, and Ulta Beauty. A CNBC report claims that the newly launched program will allow the complying retailers to list their products on Google Express, an e-commerce shopping and shipping service similar to Amazon Prime. But unlike Amazon Prime, Google Express does not require users to pay for a subscription.
Retailers can also list their products on Google Search and Google Assistant on smartphones and voice devices. In return, Google will take a cut of the retailers’ purchases on top of payment of placing ads on its platforms. The tech giant asserts that “the listing will appear under sponsored shopping results.” As such, it won’t affect regular search results on Google.
Google Wants What’s Theirs
This retail coalition of sorts came to fruition after Google discovered that millions of shoppers were sending image searches of products, asking questions such as “where can I buy this?” “Where can I find it?” “How can I buy it?” “How do I transact?”, Said Daniel Alegre, president, retail and shopping at Google. Alegre further explained that mobile searches asking where to purchase products rose by a whopping 85% over the last two years.
Currently, consumers who make these searches end up purchasing the items from Amazon. However, analysts expect that the new program will put an end to that by helping Google’s allies to keep those shoppers. “We have taken a fundamentally different approach from the likes of Amazon because we see ourselves as an enabler of retail,” Mr. Alegre said of his company’s new program. “We see ourselves as part of a solution for retailers to be able to drive better transactions.” This, Alegre believes, will get retailers “…closer to the consumer.”
Talk is Cheap, but Numbers Don’t Lie
It’s still early, but the historically fierce competitors, now turned partners, have begun to see the fruits of their labors. For instance, Ulta Beauty has seen its average value increase 35% since it teamed up with Google. Similarly, Target stated that the number of items in consumers’ Google Express baskets has risen by around 20% on average. All thanks to its alliance with the tech giant.
And it looks like these retailers, “Can’t stop, won’t stop” at just this. In fact, it looks as if they have their eyes set on the voice shopping market, currently dominated by Amazon’s Echo home devices. It seems Wal-mart and Target had both agreed on a deal to appear in search results through Google Home. Which, according to consultants and analysts, will be installed in 55% of U.S homes by the year 2020.