Alphabet’s Google has found a new way to make money off of its search engine, getting a cut of product sales from listings on Google Search and Google Express.
According to a report in Reuters citing Daniel Alegre, Google's president for retail and shopping, under the new program retailers are able to list products on Google Search, Google Express and Google Assistant on both mobile and voice devices — and in exchange, Google gets a cut of the purchases. The retailer also gets to link their loyalty programs, noted the report. Reuters noted Google is hoping the new program will help retailers pick up sales on computers, mobile phones and smart home devices, which it thinks will be the new area of growth for eCommerce. Alegre told Reuters the idea for the new program was Google’s knowledge that millions of consumers were sending images of search products wondering where and how to purchase the products. He noted that mobile searches asking where to buy products have jumped 85 percent during the past two years. The way it currently ends up is that the consumer purchases on Amazon after searching on Google. With the new program, which Reuters noted Google is calling Shopping Action, all types of U.S. retailers can benefit.
“We have taken a fundamentally different approach from the likes of Amazon because we see ourselves as an enabler of retail,” Alegre said in the Reuters interview. “We see ourselves as part of a solution for retailers to be able to drive better transactions...and get closer to the consumer.” Because retailers through the Google program can offer products via the Google Home voice activated device, it could help them stop customers from heading to Amazon to make a purchase and also give customers personalized recommendations that are based on what they purchased in the past. That, too, is seen as a way to compete better against Amazon.
Alegre noted that retailers who are already using Shopping Actions saw the average size of customers’ shopping baskets jump by 30 percent. For instance, Ulta Beauty — the cosmetics retailer — saw order sizes increase 35 percent since using the service, Mary Dillon, CEO of Ulta told Reuters. Meanwhile, Target has a relationship with Google — and as a result, has seen Google Express shopping carts increase close to 20 percent on average during the course of the past six months. Target Chief Information and Digital Officer Mike McNamara said in the report that Target customers like the ease and convenience of using voice to order and purchase items. “This is just the beginning for Target and Google,” he said, noting that customers will be able to link their online account and loyalty card with their Google accounts and get 5 percent off on purchases as well as free shipping.