Against the background of recent news - Jack Dorsey's predictions that in ten years, Bitcoin will become the only digital currency and Facebook shares crash after a new scandal about data leakage from the social network - you could well have missed the Google announcement about the launch of the Shopping Actions program.
Shopping Actions is a wake-up call for Amazon: the project gives consumers access to a universal shopping cart, which can be filled with goods from the entire network right during their search on Google, with convenient shopping. Payment is made using billing data stored on Google, which was made possible by the Google Pay upgrade last month. Buyers will be able to use, among other things, their billing data stored on the merchant’s website when they browse the site in the Chrome browser.
Google Universal Shopping Cart is multichannel. Consumers can start their search on a regular computer, go to a mobile device, add other products to it, and then use Google’s voice assistant for the same purpose, place a purchase and receive delivery from the merchant.
The program also provides participating retailers the opportunity to consolidate their proposals in the results of search results for certain requests in the form of sponsored publications.
For example, while searching for terracotta flower pots, a consumer may first see relevant offers from Walmart or Target in sponsored links. He can choose the pot he likes, add it to his basket directly from the Google search results page and buy it without having to go to the Target website, Walmart (or another retailer participating in the program). Merchant is still responsible for the delivery of goods. Among the early participants in the program are such brands as Walmart, Target, Ulta Beauty and 1-800 Flowers.
According to Google representatives, Shopping Actions was launched as a response to a significant increase in the number of requests for where to buy this or that product. According to the search giant, over the past two years their number has grown by 85%. In its
blog post announcing the launch, the company also reported that 44% of voice inquiries are used by consumers to buy goods purchased weekly, such as food and household goods. Ease of accessing a single shopping cart and buying goods from it, according to Google, simplifies the process of buying and paying for goods.
According to the company, retailers who have tried the Shopping Actions report an increase in the number of items in the basket by 30%, simultaneously with an increase in conversion compared to the use of sponsored ads alone.
But in order for Shopping Actions to rightfully win the title of “the next major phenomenon in the e-commerce world,” Google will need to convince more than 60% of US consumers starting to search for products right on Amazon, quit this habit and start instead using their services for making purchases from the moment the goods are searched until the completion of the order.
Achieving this goal will depend on how well the service of retailers participating in the program will be, whether they will be able to offer more attractive offers and how many consumers will actually go to Google.
Ubiquitous presence
As I have repeatedly written, today Amazon has no strong alternative offers on the market.
This situation has developed because Amazon has long ceased to be just an online retailer. Today it is a market with a powerful loyalty program, so attractive that tens of millions of people are willing to pay annually for the opportunity to receive all its benefits.
Amazon is present not only in the network, but also in offline retail, and not only in the grocery segment. Under the name of the company opened bookstores and high-tech minimarkets. Amazon also has partnerships with some offline companies, which are considered to be its competitors. Kohl's, for example, sells some of Amazon’s branded products and accepts returns on them.
The company has Alexa's ubiquitous voice assistant, initially available only on branded Amazon devices, but quickly spread to many other devices, including cars, home appliances, and smart devices. Alexa also exists as a mobile application for smartphones and wearable devices. It has long been turned into something more than just an AI bot. People talk about her as if she had become a member of their family. Not sure what to try today for dinner? Ask Alexa. Thinking about which car to choose? Ask Alexa. Looking for sports scores? Ask Alexa. Want to escape from the poor results of sports matches? Alexa will tell you a joke.
In other words, Alexa is quickly becoming part of the daily lives of consumers.
The Alexa ecosystem is open to anyone who wants to teach her new skills. This opportunity has generated interest from developers from a wide variety of industries and segments, wishing to use Amazon’s voice assistant as a channel for promoting and selling a wide range of products and services, from health care and insurance to banking products and billing solutions and even stationery supplies. .
The Amazon platform itself is available to consumers, regardless of which device or operating system they use. It doesn't matter if the retailer has its own application. Amazon Places helps fast-food restaurants deliver food if they have at least their own website. I can ask Alex to help me find and buy something from Best Buy, and thanks to the
partnership agreement between the two companies, she will be happy to do it without installing any additional applications.
Amazon has programs that help merchants achieve success. The company helps all merchants to arrange delivery and provides working capital to sellers for the growth and development of their business.
All these moments set the bar high for everyone who wants to invade Amazon territory. A high degree of consumer confidence, ease of one-click purchase, the widespread availability of Amazon and Alexa on all types of devices, all channels and operating systems has created the
Amazon Effect , which in general has become a nightmare for competing retailers.
Big scale bet
The launch of Shopping Actions is essentially a big Google bet on a scale that this company can afford.
Firstly, the calculation is made on the fact that the company will be able to turn its search engine into the world's largest marketplace.
Secondly, the bet is placed on the list of participating retailers capable of providing a large influx of customers at once. Their success should attract more and more new merchants, inspired by the success of the major pioneers.
Third, the calculation is made on providing retailers with access to a voice commerce platform with a large and constantly growing user base capable of competing with Alexa.
Fourth, the bet is placed on billions of search queries performed by consumers daily and able to provide merchants with new customers, with whom it will be possible to monetize their interactions.
Fifth, the calculation is made on various applications connected to the search, including Maps, Waze, Gmail and others, which increase the number of points of contact between merchants and consumers.
Shopping Actions and customer reaction
This is an interesting strategy.
In 2015, only
40% of our survey
respondents said that they are starting their search for purchases on Google pages.
Three years later, Google reports that the number of requests for "where can I buy ..." has increased significantly. This suggests that consumers turn to Google for help in searching for specific types of products or brands that, in their opinion, are either not available at Amazon at all or are not available at its site at the right time.
Now they can purchase such products using the Shopping Basket universal basket or order them by contacting a Google assistant and paying with a branded merchant payment method associated with its loyalty program.
Then the order goes to a specific retailer and it processes it.
And it is at this stage that the test of the Shopping Actions program for strength in real conditions begins.
Retail is constantly changing. Its development is influenced by many factors, including volatile consumer preferences. Consumers choose retailers offering what they, consumers, need. Regardless of what pleasant little things make this or that store a favorite of buyers, the latter always start shopping with well-known, convenient retailers who are trusted.
In a world where all purchases are made on demand, convenience means that the retailer also needs to be able to arrange delivery on demand. This means that success in retail in general, and the success of the Shopping Actions in particular, will be determined by how well retailers participating in the program can cope with the “last mile”, including by ensuring delivery right on the day of order as a competitive advantage due to effective management of warehouses and assortment.
Logistics management and optimization of the last mile is the very reason why Target acquired Shipt in December last year and was one of the first to introduce the possibility of online purchase with self-delivery of goods in any store.
For the same reason, Walmart, a champion in efficiently building a supply chain, focused on strategies to improve its product delivery system. This effort includes experimenting with many things, including attracting Uber employees and drivers to deliver purchases to consumers, creating a new platform called Wam! (the patent describes it as a new retail and grocery delivery platform) and an investment in the development of the same day delivery concept for groceries and other purchases.
That is, in general, we are talking about a large number of vital nuances of retail, which are beyond the control of Google.
This state of affairs creates certain risks for Google and Shopping Actions. The very first untimely delivery of a purchase made through the company's new service may be the last: a disgruntled consumer will go to the competitors.
However, let's not forget that we are talking about an early stage of project development, and the company will obviously continue to invest in vision and technologies that allow retailers to get an alternative to Amazon, and Google is a strategy of competing with the most popular marketplace in a commercial system of three elements: search, payments and online advertising.
The first step Google took in this direction was the decision to improve and standardize the
shopping slider carousel at the top of the search results page, making it more convenient for consumers and, therefore, more in demand for retailers.
The second step was the creation of the
Google Assistant voice commercial platform and the subsequent opening of access to it for all merchants wishing to use it in their projects, as well as for developers wishing to teach it new skills.
The third step was to combine the company's separate payment mechanisms within a single, streamlined and improved Google Pay brand.
The fourth step was the standardization of placing orders through a search by creating a single basket with a thoughtful and stable service and payment using Google payment methods integrated with merchants' branded payment methods.
Perhaps the fifth step will be the standardization of delivery, implemented using one of the ambitious projects Alphabet -
Project Wing ?
Project Wing is testing the use of drones to deliver packages to suburban areas, most recently in Australia. A startup recently hired one of Amazon’s former executives and Staples CTO for the commercial launch of services. Shopping Actions now has merchant partners who can invest in their own logistics initiatives. Most retailers do not have such opportunities. To turn a search into a shopping experience for Google, you need to think about not only shopping and payment, but also such an important component as delivery that makes possible the existence of most modern merchants.
And then maybe the sixth step will be the conclusion of partnership agreements that allow Google to provide credit and financial products that contribute to the growth and success of partner merchants?
The future will show how true these guesses are.
Be that as it may, it's nice to see the emergence of competition in the field that many have long given way to Amazon. Competition is like oxygen, contributing to the growth, expansion and prosperity of markets. And in this case it is not about competition between Google and Amazon. It will be a struggle between Amazon and all other retail, operating with the support of the Google platform.
It is quite possible that the big game is starting right now in retail.
