Google has signed several major retailers to a new program under which their merchandise will be prioritized in Google search results, the Google Express shopping service and the Google Assistant virtual assistant platform, Google's president of retail and shopping Daniel Alegre announced at ShopTalk Tuesday.
Walmart, Target, Home Depot, Costco and Ulta Beauty are among the first to participate in Google's Shopping Actions program, which will also allow search results to link to the retailers' loyalty programs. Google will get a percentage of the purchases made through those links.
Alegre said retailers in the program have seen average basket size increase by 30% since joining the program. Ulta's average order value rose 35% and Target's rose 20%.
Google has been selling search ads to retailers for a long time, and more recently has been forging deeper partnerships as it tries to fulfill its own shopping ambitions. For example, late last year, Google teamed with both Walmart and Target to allow consumers to shop the retailers' sites through Google Assistant and Google Express.
Shopping Actions goes much further by raising the profile of participating retailers and their products on Google searches, and by allowing shoppers integrated shopping across multiple Google platforms, along with loyalty program links.
For Google, and its retailer partners, this move is all about Amazon. Both have suffered at the hands of the e-commerce giant. Amazon has beaten Google and all other traditional search engines as the starting place for shopping searches, and has forced disruption throughout the retail sector, everywhere from department stores to apparel retailers.
What's the best way for both Google and major retailers to fight back against Amazon? By keeping shoppers away from the e-commerce giant when they start their product search. The time may be right to do this, as Amazon's dominance in shopping-related online searches has been slipping, according to a Survata study from late last year.
"Where can I buy (insert product type, brand, etc., here)" sounds like an innocent enough question, but for any retailer, including Amazon, there is much to be gained in being able to influence the search results of that question. That's what Google Shopping Actions can do for Amazon's competitors, and there is enough value in that influence that Google can charge a handsome sum for it.
Now, for the price to be worth it, the program has to work, and there are some early indications that it is working. For example, according to the Reuters report, Ulta saw its average order value rise 35% following a partnership with Google.
Retailers' willingness to pay Google for search favors could play especially well as online shopping activities increasingly start as voice searches, whether through mobile smartphones or home-based smart speakers like Google Home. It's another area where Google is looking to eat into Amazon's current dominance, and where retailers again need to ensure they are well represented.