In late July, Google made an announcement that is bound to give a good shake to the e-commerce world. The company is launching a new policy of letting U.S. retailers sell products through Buy on Google, for free. This applies to all products a buyer surfaces through a normal Google Search.
Buy on Google gives shoppers a convenient way to buy something at the moment they discover it in a straight Google search. Having made it as easy as possible for the buyer, Google wants to make it as painless (and attractive) as possible for sellers to jump on board. Hence, the Buy on Google free checkout experience has been enhanced for both buyer and seller. Until this change, Google has charged a commission fee on all sales that it processes using a buyer’s stored Google account and payment info. Now, the e-commerce seller will keep the whole payment.
Or, BYO payment processing if you want to offer buyers more options.
Google Pay will no longer be the only way for shoppers to pay for their orders. Google Shopping will now be integrated with two of the most common third-party payment processors: Shopify and Paypal. (Google hints that more third party processors may be added later but it is just these two for now.) This means that if someone uses Buy On Google to buy from your store, they can choose to use their Shopify payments account or their PayPal account rather than their Google payment account. Google is opening its platform to all Shopify retailers, so inventory and order management can be smoothly coordinated with your Shopify store.
What’s in it for Google?
By foregoing commissions, Google loses a small revenue stream, but they’re looking at a bigger horizon of the expanded opportunities they’ll get by luring more merchants into the program. The company will reap the benefits of keeping a user in the Google Search environment. The longer someone stays, the more money Google makes by serving ads and collecting data.
One potential downside to consider
When a shopper can buy on Google, they’re not visiting your store’s website. This means the loss of valuable opportunities for things like lead generation, upselling, signups for loyalty programs, and customer data collection.
The loss of these opportunities may well be offset by not just eliminating the commissions you’d be paying Shopify or PayPal at your store’s site–you’ll also be attracting a lot more shoppers. More and more people value the convenience of one-click buying over the multiple frictions of coming to your store, setting up an account, etc. It may be a reasonable bet that sales volume and new customer acquisitions will make up for the loss of personalization.
Another change we are watching closely
Buy on Google also announced it is now accepting commonly-used product feed formats. For now, it looks like they’re mainly referring to Amazon product feeds. This means you will be able to connect your Amazon inventory to sell directly on Google without reformatting your data. If you sell through multiple online channels, a product feed syndication service is still the best bet. It will automatically adjust all your product feed data to every format on every channel you use.
Among other enhancements is a new option that lets retailers add product information (like images or technical specs) by pulling from the existing Google database, eliminating what can be one of your most time-consuming steps.
And finally, a new small business filter on the Google Shopping tab will help shoppers wishing to support small businesses to find smaller online sellers of the product they want.
Google is doing a slow rollout with a pilot they intend to expand to all eligible sellers in the U.S. over the coming months. Although foreign sellers won’t be included in the commission-free program until the end of 2020 or into next year, foreign retailers are getting a small break in that they will no longer need to process Buy on Google payments through a U.S.-based bank.
My mission at Shoppingfeed is explaining how to leverage e-commerce platforms and SaaS technology to e-merchants who just want to run their business and make more money.
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