Google is teaming up with retailers to compete with Amazon, offering a service called Shopping Actions that gives Google a slice of the profit when the retailers list their products with the search engine giant.
According to Reuters, the technology company is collaborating with companies like Target Corp., Walmart Inc., Home Depot Inc., Costco Wholesale Corp. and Ulta Beauty Inc. on a new program called Shopping Actions, where, in exchange for the companies listing their merchandise and online loyalty programs on Google Search, the Google Express shopping service and Google Assistant on mobile phones and voice devices, Google will earn a piece of the profit from each purchase.
Analysts say that currently many consumers who do a Google search for an item usually end up completing the purchase on Amazon. Google is looking to change that by offering buyers a single shopping solution.
“We have taken a fundamentally different approach from the likes of Amazon because we see ourselves as an enabler of retail,” Daniel Alegre, Google’s president for retail and shopping, told Reuters exclusively. “We see ourselves as part of a solution for retailers to be able to drive better transactions…and get closer to the consumer.”
Alegre said Google created the Shopping Actions business initiative after noticing that millions of consumers were sending image searches of products, asking questions like: “Where can I buy this?” “Where can I find it?” “How can I buy it?” “How do I transact?” Mobile searches for where to buy products increased by 85 percent over the past two years, he noted.
Retailers are also optimistic about the prospects of being able to offer products through the Google Home voice shopping device, given the fact that, according to Juniper Research, smart voice devices will be installed in 55 percent of U.S. households by 2022. Not only will the stores be able to offer their customers personalized recommendations based on the customers’ purchasing history, they will also be able to offer them the option to add products to their carts using the device.
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There is also the profit incentive that would be gained by tapping into the competition’s market. According to a report from RBC Capital Markets, Amazon’s Alexa platform could generate $10 billion in revenue by 2020.
“Brands are looking at Google as the enemy of the enemy and that makes Google their friend,” Guru Hariharan, CEO of retail technology firm Boomerang Commerce, said, referring to the competition between Amazon and chains like Walmart and Target.
Incidentally, both Walmart and Target signed deals last year to appear in search results with Google Home. As part of the program, Target shoppers will soon be able to link their online account and loyalty card with their Google accounts and receive 5 percent off purchases and free shipping, the company said.
According to Google, early results on the program showed that retailers have seen the average size of a shopper’s cart increase by 30 percent. In fact, Target has reported that, as a result of the collaboration with Google, the number of items in shoppers’ Google Express baskets have increased by 20 percent.