The Wall Street Journal recently reported that Google is planning to add a “Buy” button to some paid search ads on mobile search result pages.
The ads will likely appear under a “Shop With Google” heading, according to the WSJ’s anonymous sources. Users who click the button will land on another Google page where they will choose color and size, enter payment information and add shipping details. Google will host the transaction and then pass the payment on to the retailer.
The WSJ article points out that this shift “marks a major and potentially risky strategy shift that will turn the company into more of an online transactional business” than an information provider.
Although some retailers quoted in the WSJ article expressed fear that they might lose control of their customer relationships by allowing an intermediary into the transaction, details are still thin enough that no one really knows the full effects of Google’s new mobile shopping strategy. However, the program as described includes several elements that ultimately may increase overall mobile sales and profits for participating retailers:
- Mobile sales made easier. Mobile internet usage continues to increase rapidly, and the new “Buy” button is said to be limited to mobile search results. Making mobile online shopping easier could increase conversions and result in more overall sales.
- More payment options. Google is reportedly planning to accept a wide array of payment options in addition to credit cards. If those options include Apple Pay, Google Wallet or PayPal, consumers who prefer those payment options might be more induced to buy.
- Intact margins. Amazon and eBay have immense traffic but take a percentage of each sale, a model that’s failed to appeal to many large retailers. Google’s new mobile shopping program will reportedly keep to Google’s existing advertising model, where retailers pay for clicks (in this case, clicks on the “Buy” button in their product ads), which most large retailers already know and accept.
The sources quoted in the WSJ article note that Google plans to test the program with several large retailers, including Macy’s (Macy’s has not confirmed this). It’s fair to assume that the program may filter down to smaller businesses with Google Shopping product feeds after the test period.