Product discovery wars 2020: Google, Amazon and your retail business
Google’s recent revamp of its product discovery tool is designed to fend off competition in the U.S. from Amazon in the $55 billion search advertising market.
How does this turf battle between the two tech giants affect retailers and their customers?
Google renamed its Shopping Express product discovery tool to Google Shopping, and improved capabilities to make it easier for consumers to find and buy products online. As it is, more and more consumers use Amazon instead of Google to research products because Amazon has made it so easy for them to shop and buy.
As a result, Google’s market share of search ad revenue is expected to drop from 73% this year to 70% by 2021, while Amazon’s market share will grow from 12.9% to 15.9% in the same period, according to an eMarketer forecast.
If you’re a digitally enabled retailer, Google and Amazon’s tug-of-war can benefit you in two ways.
Google’s defensive move to improve its product discovery platform benefits both online retailers and traditional retailers with online stores. By removing the friction from online browsing to purchase, shoppers can now more easily buy products directly through Google’s shopping platform (like they would on Amazon or another retailer’s website).
Second, traditional stores with a solid online presence can get their products in front of more shoppers. Even if a consumer’s shopping journey begins online with a Google search, the majority of consumers still prefer to go into a physical store. The store’s distinct advantages of sensory selection, "try before you buy," instant gratification, and fulfillment should not be underestimated.
A new report Eagle Eye just released, “The Connected Customer,” validates this premise. The majority of consumers in the U.S., U.K., Australia, and Canada will research products on their mobile device or online before making a purchase. But some 90% of all sales (including click-and-collect purchases) are still completed in a store. Retailers need to assure their physical presence by doubling down on their location in the online world.
Creating a “digitally augmented store”
Although we live in a highly connected world, too often digital capabilities disappear inside the store, limiting customers’ options to discover new products or learn more about the ones they love and could be incentivized to buy. That’s a big pain point for shoppers and an even bigger pain point for retailers that are missing out on sales. A “digitally augmented store” can address these challenges.
Whether it’s a restaurant, sales venue or any type of physical location with a physical point of sale, these businesses can take advantage of an additional digital “layer.” This mobile-enabled layer allows them to engage with customers through different online channels; for example, the brand website, their social media accounts and a loyalty program app, while they’re inside the store.
In this environment, retailers can create opportunities for customers to discover and experience products in ways their online-only rivals can’t. Interactive signage or shelf-labels can be scanned on customers’ mobile devices to deliver detailed product information. With the right technology, customers can be sent promotions when they’re approaching a store, through a mobile app with geolocation settings turned on.
Our research shows 31% of consumers are very likely to make an unplanned purchase if they receive a promotion on their mobile when they are near a store. A relevant and personalized offer can also drive 33% of customers to make unplanned purchases.
The greatest benefit of using mobile-enabled digital tools to augment your retail store is the chance to learn a lot more about your customers from the data they choose to share. This can drive insight that can be used to tailor offers and promotions most relevant to them or encourage the discovery of new products that the data infers they’re likely to buy. It’s a successfully proven practice (thank you, Amazon) that retailers of all types and sizes shouldn’t be afraid to apply.
Taking a page from online competitors’ playbooks, retailers with physical stores can collect valuable data whenever they digitally connect with customers to inform future promotions and return visits. They should also match this with the ways they engage customers at the paid advertising and social search phases of the journey online.
During 2020, Google, Amazon and other players in the search ad market will be vying for the minds and wallets of consumers who are almost always digitally connected, at any stage of the shopping journey. Adapting your retail operations to this new environment and making sure your digitally augmented store is ready to capitalize on the new and emerging online product discovery and drive both footfall sales in the year ahead.
Miya Knights is head of industry insight at Eagle Eye.