Google Shopping Changes Announced

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What does this mean for you?

Today (21st April 2020) Google announced that they are rolling out free Google Shopping (Google PLAs) across the US with a global launch to follow shortly. This means that any business will be able to showcase their products in the Google Merchant Centre for free. But what could this mean for retailers and the market?

Let’s start by looking back, Google Shopping (then known as Froogle) launched at the end of 2002. This was a huge step forward for retailers who could showcase specific products in a product carousel. Also, a big change for customers who could make a more informed decision before clicking to view a product. By 2008 Google Product Search (as it was then known) was a prominent feature on the search engine results pages in the UK. Generating strong performance for many retailers.

The performance was so good that in 2012 Froogle rebranded as Google Shopping and monetised the feature, forcing many smaller businesses out of the auction.

In 2017 Google was fined for giving priority to their own shopping services. Their response to this was the launch of CSS (or Comparison Shopping Service). This allowed retailers to reduce their Shopping costs by around 20%. It also meant that Google, in theory, addressed the monopoly challenges suggested by the ruling from the EU Commission. But, there were still accusations from many that Google was not doing enough.

Fast forward to today’s announcement it seems as though Google is doing everything they can to prevent any further legal challenges. They’re also trying to avoid the €2.4billion they’ve already been fined increasing. But what could this mean for the market

1. More choice for customers

It opens Google Shopping for many more retailers. Those with smaller budgets or in competitive sectors will be able to list their products for free. Unlocking a potential new revenue stream with no investment. Good news for retailers and customers who are looking for more choice

2. Increased competition

Whilst listing on Google Shopping will be free. Top product placements will seemingly still be auction-based. Increased competition from more retailers advertising on the platform will increase prices for the top placements. Ironically, by making Google Shopping ‘free’, they could end up generating more money.

3. Short-term cost increases

People not on Google Shopping will surely look to get set-up quickly, ready to take advantage of this opportunity. In the short-term, this could see retailers who are currently live paying higher CPCs. Costs across many sectors have reduced in recent weeks due to competition declining as a result of COVID-19. This trend may shift quickly.

4. An uplift in Bing Shopping adoption

It may be good news for Bing Shopping users. If costs for top placements do increase significantly, those who are currently live with Bing Shopping may see some benefits. Brands may suddenly place more emphasis on Bing Shopping. Bing may become increasingly cost-effective for businesses. Those with historical data should use historical data to improve optimisation and ensure CPCs do not inflate.

5. Negative impact on CSS

The impact on CSS partners remains to be seen. For example, will the discounts available still be applied to costs? Whatever the detail, CSS is likely to be affected in some way as a result of this. Those retailers paying for CSS providers may see the benefit of this reduce depending on budgets and which sector they are in. Those retailers aiming to appear in top positions may continue to see benefits. Whilst those smaller retailers looking to gain some cost savings may not see CSS as a worthwhile investment.

6. Feed quality may become more important than it already is

The requirements around product feeds are already set at a high standard. Those with a quality feed perform better on Google Shopping. As competition increases, there is likely to be an increase in the number of poor-quality feeds which are uploaded to the Merchant Centre. A good quality feed may be more important than ever to stand out from the competition. Unsure what this means for you? We can audit your feed and provide some key recommendations to ensure you are hitting Google’s requirements.

One thing for certain is that retailers should be looking to take advantage of this update. It could be a great revenue stream for many businesses, especially those who already have product feeds in place.

If you want to know more or have Shopping campaigns or a feed that may need some TLC. Feel free to drop us a note – we’d be happy to help!

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