By Mickael Froger, CEO of Lengow.
A look at research conducted by the Centre for Retail Research reveals that online sales in the UK account for 10.7% of total retail sales. According to IMRG and Capgemini’s research, e-commerce is a 110.5 billion euro business in the UK. With that said, gaining visibility in an increasingly crowded space has become the key challenge for all merchants.
In just a few years Google Shopping has become a quintessential platform for selling products online. With the rapid expansion of e-commerce in developed countries and the continued decrease of barriers to entry, small and medium online retailers face increasing competition that is slowing down their growth.
To get ahead of the game, merchants must expand their online presence across more and more external channels. However, this task has become more complex and requires more time and technical resources than before.
Among various external acquisition channels, Google Shopping is a major traffic generator that helps merchants gain visibility among many shoppers. However, recent changes to a wide range of its technical specifications and the fact that Merchant Center’s features now more closely resemble those of AdWords have obliged online retailers to further increase their Google Shopping expertise. This is necessary in order to take advantage of all of its benefits in the long term.
An ROI-centric approach responding to market needs
Nowadays, online retailers are no longer satisfied with just being present on external platforms: they use KPIs (Key Performance Indicators) to measure profitability generated by all of the levers they use to create sales opportunities. The evolution of Google Shopping is going in the direction of this new ROI-centric approach.
As a result of how it now works more closely with AdWords, Google Shopping requires e-merchants to create efficient product feeds—which are both well-segmented and complete—in order to facilitate the auctioning of goods and carry out promotional operations that are unique to each segment.
Sales opportunities there for the taking
As long as they are present on Google Shopping, e-merchants must also pay special attention to the distribution of their products in order to optimise their rankings within Google’s shopping-related search results. By being able to track the results of any of their sales campaigns on Google Shopping, online retailers can actively manage the ROI of each of their sales offers. They can also benefit similarly by creating bundles.
The updates to Google Shopping that took place in September 2014 brought an end to PLAs ("Product Listing Ads") and launched the transition to Shopping Campaigns. The new requirements regarding product feed specifications, which have been reinforced to improve the quality of data available to users, require more time and technical expertise from online retailers. Some integrators developed a Products API, which is added to the Feeds API that had been used so far to simplify the formatting of product data feeds. In this way, merchants can create, update, and delete products automatically from the API.
E-merchants are also able to manually trigger escalations from Google instead of waiting for an automatic review of their feeds. They can also track each product to monitor its indexing status.
This new feature most notably allows for merchants to know which parts of their product catalogues are distributed by Google and use artificial intelligence software which proactively corrects errors encountered during the delivery of a product feed to Google Shopping.
Is Google Shopping a must?
According to Adobe Marketing Cloud, a staggering 91% of advertisers in the UK market placed ads on Google during the second quarter of 2014 (in addition to 78% in the USA and 96% in Germany, respectively). It is safe to say Google is a major player in the world of online retail.
Moreover, by gradually delegating its best advertising spaces to Shopping Campaigns and giving them a product rating scale, Google is gradually increasing the appeal of its ad format to e-merchants. This is why many merchants choose to redistribute a portion of their budgets allocated to Sponsored Links to Shopping Campaigns, although the competitive intensity tends to increase CPC.
Google Shopping is thus one of the few acquisition channels that doesn’t require e-commerce sites to choose between volume and profitability!
For all these reasons, Google Shopping should be considered by e-merchants as a channel that is as strategic as all marketplaces and price comparison engines put together.