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the launch of Google Shopping – good news for retailers?

3 December 2012

Earlier this year, Google announced that it is changing the way products are advertised. Google’s Product Search is being replaced with Google Shopping, a paid advertisement service.

Currently, consumers can search for items using Google Product Search. This is a free service and there are no charges for uploading advertisements or for the additional traffic the service generates. Customers simply type the name of the product into the search box e.g. ‘tent’ and then select ‘Shopping’ from the choices at the top of the Google site. Google lists all products which match the description searched for.

The new service, Google Shopping, has already been launched in the US and will be available in the UK in January 2013. Google say that this new shopping experience will help shoppers “better research purchases, compare different products and their features and prices, and then connect with merchants to make their purchases” . On the face of it good news for consumers, but what does this mean for retailers?

Tailoring the shopping experience to the user

Most online customers are looking for a quick and simple online shopping experience. Google Shopping will provide customers with just that, an instant, easy-access search mechanism which will collate a variety of global advertisements.

Currently, Google Product Search simply lists advertisements in a 2 dimensional format. The move to Google Shopping promises the ability to create new visually engaging adverts boasting 360° swivel product views. Advertisements will also include information on price, title and retailer name. Discounts and promotions on items can be listed and linked into other Google products including Google Maps and Google Offers App, offering wider product exposure.

Customers can consolidate shopping research in one place by using a ‘shortlist’ and they can also do side by side comparisons of product specifications. Shortlists can be shared with friends and they in turn can comment on the products listed.

The new style of advertisement certainly looks enticing and the price comparison tool is bound to be popular with shoppers. Retailers can display their products in a 3 dimensional format which will be appealing on the eye.

With the more enticing offer comes an obvious immediate disadvantage – retailers will now have to pay to place their advertisements.

Using purchasers to spread the word

Google Shopping allows purchasers to post reviews and give the product a score out of 5. Once a review is posted it will be viewable by everybody who searches for that product.

Google will display the reviews posted, starting with those posted by friends of the shopper, such friends will be identified using the shopper’s previous Google activity. This is a great way for retailers to build business through word-of-mouth with minimal effort.

With a better consumer experience comes greater risks for retailers

Are there other less noticeable disadvantages to displaying advertisements in this manner? Some of these issues are applicable to the current Google Product Search, however now that Google has introduced a fee for listings, this is a good opportunity to decide whether the risks are worth the fee.

Protecting your data and confusion in the market place

The listing format means that advertisements are an easy target for screen-scraping. Competitors can use Google Shopping as a central location to extract data about products and to undercut prices using screen-scraping software. Whilst merchants may have invested in anti screen-scraping protection for their own sites, by placing products on an external site their control over how the data is harvested and used is inevitably diluted.

Google’s terms of service provides the following instructions to users “don’t misuse our Services. For example, don’t interfere with our Services or try to access them using a method other than the interface and the instructions that we provide.” The current policy was introduced in January 2012 following a revamp by Google to simplify its terms. Many changes were made; but interestingly the previous policy specifically prohibited users from accessing (or attempt to access) any of the services through any automated means, including the use of scripts or web crawlers. This prohibition would also extend to screen-scraping.

Regardless of the policy in place, in practice what measures can Google actually take to prevent either web crawling or screen-scraping? Google’s powers, and its vested interest in preventing screen-scraping, are unlikely to deter determined screen-scrapers. By placing advertisements on Google Shopping, product information will be more accessible to consumers but also more readily available to competitors.

Another potential issue with the format is that the list of advertisements could cause confusion between the products of one merchant with those of another. Unless the merchant’s brand name is prominently displayed, it may not be easy to differentiate the products of one merchant from those of another. The ease of collating product information and product comparison data could also make it easier for the copy-cat product market to flourish.

Damaging reviews

Customer feedback is a very useful tool when its good but negative feedback on a global basis has the potential to cause significant reputational damage. While we can hope that most users would post honest criticism, there is a danger that retail businesses could be defamed on an international forum. Internet users can be difficult to trace, so defamation redress may not always be possible.

Google’s Terms make no promises to end users on content review so retailers need to be vigilant in their monitoring of products reviews posted.

Keeping advertisements up-to-date

And finally, retailers need to consider the investment that will be required for regular review and maintenance of the advertisement. Retailers will need to ensure that the advert genuinely reflects current stock and availability. This is no different to any advertisement listed on the current Google Product Search but the addition of the 360° swivel image on Google Shopping adverts will create additional work. For a retailer who changes stock depending on season and the latest trends, this could be a very time consuming process.

Balancing competing interests

Retailers face many considerations before signing up to this service. Google Shopping certainly offers many benefits for consumers but perhaps at the expense of the interests of retailers.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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