Everywhere you look, all you see is doom and gloom for retail. Foot traffic is in decline by 50 percent in recent years. Eight thousand-plus U.S. retail stores projected to close this year. Is this the beginning of the end?
Hardly. We all know that people are doing more shopping than ever, but their shopping habits have changed. The U.S. Census reports that while traditional retail sales have been growing 4 percent to 5 percent quarterly, e-commerce has been growing 15 percent quarterly, with total e-commerce sales expected to grow to $632B by 2020.
So, is e-commerce the best way to go?
E-commerce is definitely growing, but there are opportunities that are experiencing outsize growth. In fact, while e-commerce is logging 15 percent growth, there's a new channel that has seen more than 50 percent revenue growth and controls half of retailer clicks.
Which channel is this? Google Shopping.
Why Google Shopping?
Google Shopping is the search giant's powerful retail channel, which uses Product Listing Ads (PLAs) — i.e., the big, beautiful image ads that come up on your search engine results page (SERP) every time you perform a product-related query. As mentioned in a previous Total Retail post, PLAs enjoy massive SERP real estate, especially on mobile.
While screen real estate is a nice advantage to have, along with the industry-leading outsize revenue growth, Google Shopping offers an additional advantage that's very important.
The Power of Intent … and the Changing Customer Journey
Stop me if you’ve heard this one — the customer journey is changing. A little while back, Adweek reported that 81 percent of all shoppers perform online research before making a purchase. HubSpot reports that shoppers spend three-quarters of their total shopping time researching a purchase.
This is because retail is no longer a simple game of retailers controlling a handful of channels — TV, radio, print and outdoor. The advent of online, mobile and social have given rise to thousands of potential touchpoints, and more and more frequently, consumers are tuning them all out if they don’t find them to be relevant at the time.
The use of digital ad blockers to screen out annoying banner ads has increased 30 percent. Google Chrome, the world’s most popular browser, will add a built-in ad blocker in 2018. Simply put, customers are in control of their journey, now more than ever before.
How Can You Reach Customers Where and When They Want to Be Reached?
This is the million-dollar question. However, the answer is surprisingly easy to find. It's user intent — i.e., deeper-funnel consideration-based channels that are already being used by consumers who are searching for your products and thinking about buying them.
I'm talking about search, brought to you by search giants like Google. And, for retailers, Google's own retail channel, Google Shopping.
By focusing on intent-driven channels, retailers can actually reach their target audiences … without getting blocked out, shut down or considered to be an annoyance. Google itself reports that four out of five searchers express a preference for search ads tailored to their ZIP code, meaning that instead of tuning out all ads, consumers prefer advertising that's tailored to them.
What Do You Need for Google Shopping?
To capture the best performance for Google Shopping and drive the most sales, you need to solve for the growing problem facing not just search channels, but all digital marketing channels: data.
There's too much data available for all your individual SKUs — e.g., the color, size, materials and pricing of every men's running shoe, women's summer dress and piece of patio furniture in your inventory.
But a proper solution for Google Shopping solves the data challenge by parsing even the enormous amount of inventory-related info that retailers must track and turns that info into actionable insights that help them make better decisions. It also isn't constrained by data or scale limitations. And the best ones offer advanced customization to help retailers pull ahead of the competition.
The three most important factors you need to succeed in Google Shopping:
- Data-driven optimization: To get the best results, you need a solution that can manage the gigantic amounts of data you already produce and track. One of the best ways to do this is to use data science — i.e., the discipline of pulling insights from huge chunks of data.
- Unlimited scale: You also need metrics and analytics at scale to be able to quickly report on the progress of your Shopping campaigns and surface the insights you need to make market adjustments. You don't want a solution that struggles with large amounts of historical data or takes hours, days or weeks to actually output reports.
- Customization to business goals: Finally, to pull ahead of your competitors, you'll be best served by a solution that can customize your campaigns directly to your business goals. Advanced Google Shopping algorithms can account for factors like efficiency and cost of goods sold to help you zero in directly on fatter margins. By driving your operations directly to your bottom line, you'll be able to pull ahead of the competition.
Chaitanya Chandrasekar is CEO and a co-founder of QuanticMind, a predictive advertising management platform.
Chaitanya Chandrasekar is the CEO and Co-Founder of QuanticMind. Prior to this role, he built and managed the traffic acquisition platform and was part of the Data Science team at NexTag. His experience in the industry and knowledge of platforms led to his co-founding of QuanticMind. He strongly believes in the power of data technology, which can help decipher Big Data to unlock new ideas and opportunities. Chaitanya earned his Master of Science in Mechanical Engineering from Stanford University.