Google teams up with retailers in anti-Amazon play

Heather McIlvaine

21st Mar 2018

Google on Monday announced a major new retail initiative in the US, which allows people to purchase items through Google Assistant and shopping ads in search results.

The program, called Shopping Actions, allows people to save their payment details across Google platforms and add products to a ‘universal shopping cart’ either by clicking on a sponsored listing in a Google search result or shopping via voice on Google Home.

They can then purchase items from different retailers in a single transaction through a Google-hosted checkout flow.

Retailers that participate in Shopping Actions will have their products featured in sponsored listings in search, as well as on the Google Express shopping service and Google Assistant on mobile devices and Google Home. In exchange, they give Google a cut of the profit from every sale they make through Shopping Actions.

According to Reuters, major retailers, including Target, Walmart, Home Depot, Costco Wholesale, 1-800-FLOWERS, and Ulta Beauty, have already signed on to the program in what some are calling an anti-Amazon move.

“Brands are looking at Google as the enemy of the enemy and that makes Google their friend,” Guru Hariharan, CEO of retail technology firm Boomerang Commerce, told Reuters.

In a post on the company’s blog, Google noted that mobile searches for “where to buy” grew 85 per cent over the past two years. And 44 per cent of those who use their voice-activated speaker at least weekly say they use the device to order products they need, such as groceries and household items at least once a week.

But analysts say most of those searches currently end with an Amazon purchase. With Shopping Actions, Google wants to give consumers another option. And it is pitching the program as a win-win for retailers.

“We have taken a fundamentally different approach from the likes of Amazon because we see ourselves as an enabler of retail,” Google’s president for retail and shopping Daniel Alegre told Reuters.

According to Google’s blog post, early testing indicates retailers on average see an increase in total conversions at a lower cost, compared to Shopping ads alone. The search engine giant said it has seen an approximately 30 per cent increase in basket size for merchants participating in Shopping Actions.

Google said Target has seen the size of customers’ Express baskets increase by nearly 20 per cent in the last six months, and Ulta Beauty has seen its average order value increase by 35 per cent since 2016.

Shopping Actions is now available to retailers of any size in the US. Internet Retailing has asked Google Australia for comment on when or if the program will become available in Australia.