Alphabet Touts Retail And Shopping Progress In Q1 Earnings

By now today’s Alphabet earnings report (April 27) has circulated and been commented on extensively. And while the huge advertising comeback and skyrocketing revenues were the big stories, they weren’t the only stories. The company also reported significant development in the retail and shoppable content sectors, as well as some insight into how brands are using YouTube.

First, a quick look at those numbers. The Q1 revenue of $55.3 billion almost matched the $56.9 billion Alphabet pulled in for Q4 2020. Search-based advertising for $31.8 billion topping Q4’s $24.5 billion. On the connected economy side of its ledger, devices, subscriptions and mobile revenue were not broken out specifically. However, there is a “Google other” category that fits those revenue streams. That category pulled in $2 billion more than last year’s Q1 to reach $6.49 billion in revenue.

Its retail commissions, fees and ad revenue also were not broken out specifically, but Alphabet CEO Sundar Pichai called out the category among the company’s successes. He noted the company’s recent steps to drop product listing fees and commission fees. He also pointed to Google’s open platform approach with Shopify and PayPal.

“People’s shopping preferences have shifted constantly in response to changing conditions,” Pichai said. “It’s not just online; it’s not just offline. It’s a mix, and that’s our sweet spot, Search, Maps and YouTube. Last quarter, we talked about an increase in searches for ‘available near me’ and ‘curbside pickup.’ That trend has not changed. Searches for local and businesses are up 80 percent versus last year.”

He also called out two retailers specifically that have benefitted from Google products. Dick’s Sporting Goods, he said, accelerated curbside pickup, in-store pickup and ship from store fulfillment options in search. He claimed that this approach contributed to 100 percent year-over-year increase in eCommerce sales in 2020 for the company, which will now activate YouTube advertising to build awareness for new store concepts. Arts and crafts retailer Michaels, also activated the omnichannel fulfillment approach using Search and Maps, and to meet the surging demand for art supplies. It used the companies TrueView AR tool to tap into arts and crafts searches happening on YouTube, in 2020, driving, according to Pichai, a 350 percent spike in online sales.

“We also had a set of new partnerships with Shopify and PayPal that are giving resellers, a lot more choice, and we will continue to simplify the end-to-end user and merchant experience,” Pichai said. “We’re trying to streamline the back-end experience for merchants, especially for hybrid retailers. Overall, we want to make it much easier for retailers to get started on Google, and have their information appear across different screens.”

Google has also recently launched shoppable content capabilities to allow consumers to make purchases directly on YouTube. The company said Calvin Klein tested the program and drove a 200 percent lift in brand search and sold out multiple products for merchants.

“I think we’re still scratching the surface on what’s possible really with commercial intent on YouTube,” Pichai said. “And then there’s the opportunity to be on a major platform program. “Let’s just say that linear TV doesn’t really work anymore. Advertisers are using YouTube now to reach their audience.”

Read More On Earnings: