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Google brings free product listings to its main Google Search results

Earlier this year, Google made a significant change to its Shopping search tab in the U.S. to allow the service to primarily feature free product listings selected by Google’s algorithms, instead of paid ads. Building on that change, Google is today introducing a shift to free product listings in the main Google Search results page in the U.S. Before, it would only showcase sponsored links in its “product knowledge panel.”

This panel appears when a Google user searches for a product that has matching listings on e-commerce website. But until now, those links were paid ads. Google says, starting this summer, these panels will instead feature free listings.

This change will roll out first in the U.S. on mobile, followed later by the desktop.

Shopping ads aren’t going away, however. These ads will appear separately at the top of the page, where they’re marked like Google’s other ad units.

Since its shift to free listings in April of this year, Google says it’s seen an average 70% increase in clicks and 130% increase in impressions across both the free listings and ads on the Shopping tab in the U.S. These metrics were based on an experiment looking at the clicks and impressions after the free listings were introduced, compared with a control group. The control group was a certain percentage of Google traffic that had not been moved to the new, free experience.

Image Credits: Google

 

Google has positioned its shift to free listings as a way to aid businesses struggling to connect with shoppers due to the impacts of the coronavirus pandemic. But the reality is that this change would have had to arrive at some point — pandemic or not — because of Amazon’s threat to Google’s business.

Amazon over the years has been steadily eating away at Google’s key business: search ad revenue. In a report published last fall, before the pandemic hit, analyst firm eMarketer said Google’s share of search ad market revenue would slip from 73% in 2019 to 71% by 2021, as more internet users started their searches for products directly on Amazon.

Now the coronavirus is pushing more consumers to shop online in even greater numbers, much to Amazon’s advantage. The online retailer reported the pandemic helped drive a 26% increase in its first-quarter 2020 revenue, for example. Meanwhile, a new eMarketer forecast estimates that Google ad revenues will drop for the first time this year, falling 5.3% to $39.58 billion due to pandemic impacts on ad spend — particularly the pullback in travel advertiser spending.

Google needed to change its Search service to return more than just paid listings to better compete. Paid listings alone wouldn’t always feature the best match for the user’s search query nor would they show as complete a selection — a problem Amazon’s vast online superstore doesn’t have. But Google’s shift to free listings also incentivizes advertisers to pay for increased visibility. Now, advertisers will need a way to stand out against a larger and more diverse selection of products.

“For many merchants, connecting with customers in a digital environment is still relatively new territory or a smaller part of their business,” notes Google’s, Bill Ready, President of Commerce. “However, consumer preference for online shopping has increased dramatically, and it’s crucial that we help people find all the best options available and help merchants more easily connect with consumers online.”

How COVID-19 transformed the way Americans spend online

COVID-19 has transformed the way Americans use their phones and the way they spend their time and money online. These shifts present both a number of challenges and a raft of opportunities for savvy growth marketers.

We’ve seen COVID-19 affect a number of verticals. A number of industries have taken a hit (like music streaming and sports), while some are expanding due to the pandemic (groceries, media, video gaming). Others have found distinctive ways to adjust the way they position and sell their product, allowing them to take advantage of changes in buyer behavior.

The key to being able to read and react to changes in this still-tumultuous time and tailoring your growth marketing accordingly is to understand how public sentiment is reflected in new purchasing behaviors. Here’s an overview of the most important trends we’re seeing that will allow you to adjust your growth marketing effectively.

By the numbers: A sheltering-in-place economy

Virtually all of the data we’ve seen shows a marked difference in buyer behavior following the WHO’s declaration of a pandemic on March 11, 2020. With consumers encouraged to stay home to deter the spread of COVID-19, it’s no surprise that the biggest change is the spike in online activity.

Walmart partners with Shopify to expand its online marketplace

Walmart this morning announced a new partnership with e-commerce shopping platform, Shopify, now used by over 1 million businesses. The deal will open Walmart’s Marketplace to Shopify’s small business sellers, with the goal of bringing 1,200 Shopify sellers to the marketplace this year. The partnership will greatly expand the reach of the participating brands by placing them in front of Walmart Marketplace’s 120 million monthly visitors.

The partnership is a direct shot at Amazon, which today promises third-party sellers the ability to reach more than 300 million customers worldwide and even offers help with shipping, returns and customer service by way of Fulfillment by Amazon.

Walmart, meanwhile, has been steadily working to make its own marketplace a more competitive offering. In fall 2018, for example, the retailer announced Walmart Marketplace items would be able to participate in its free, 2-day shipping program and would be eligible for in-store returns. Today, Walmart describes its Marketplace’s growth as a “strategic priority.”

The partnership arrives at a time when the coronavirus pandemic has sent record numbers of consumers to shop online. Walmart notes its own U.S. e-commerce business grew 74% last quarter, due to the surge in pandemic-fueled shopping, which sent shoppers online for essentials like food, cleaning products, and more. Walmart’s Marketplace business’s growth even outpaced the overall business, despite the strength of its first-party sales.

“We’re excited to be able offer customers an expanded assortment while also giving small businesses access to the surging traffic on Walmart.com,” said Jeff Clementz, Vice President, Walmart Marketplace, in an announcement. “Shopify powers a dynamic portfolio of third-party sellers who are interested in growing their business through new, trusted channels. This integration will allow approved Shopify sellers to seamlessly list their items on Walmart.com, which gives Walmart customers access to a broader assortment,” he added.

With the launch of the Shopify integration, Walmart’s focus will be on those brands that can meet its shoppers’ needs. Specifically, Walmart says it will look for U.S.-based small and medium-sized businesses with an assortment that complements Walmart’s own, and that have a good track record in terms of customer service.

Shopify sellers are being invited to install the Walmart Marketplace app from Shopify’s App Store and determine their eligibility. If approved, the sellers can then add an unlimited number of products to Walmart Marketplace, while making changes to product images and inventory within Shopify. Those changes will immediately and automatically be reflected on Walmart’s site, the retailer says.

This sort of integration could be the first step in a potential Shopify acquisition further down the road — an idea that has often been floated as to how Walmart could better compete with Amazon’s dominance. But in the near-term, it turns Shopify’s seller network from one that rivals Walmart’s Marketplace to one that now fuels it. Over time, this can boost Walmart’s bottom line as it will benefit not only from marketplace listing fees but also from the increased traffic and sales that marketplace items will bring.