What started as two college kids with a shared passion for organizing the web has now become synonymous with the way we search for information. With over eight-billion web pages indexed and two-billion unique users per month, Google.com is an indispensable resource for those seeking fast, accurate answers.
Google has also transformed the world of business by connecting sellers with interested buyers at a critical point in the purchase-making process. The traditional rules of business have been radically altered for a number of industries and nowhere has this been more apparent than retail.
This article, part two of a series titled "The Googlization of Business," takes a look at Google's impact on the retail industry, examining how the search engine has shifted the overall landscape, its effect on marketing and merchandising, and Google's influence on the individual shopper.
Read part one, in which we profile the impact of Google on publishing.
Traditional and online retail parallels
Just as the general store once represented the only option in a retail landscape that would later expand into a slew of specialty retailers, sites like eBay and Amazon were once considered the only viable options for online shopping.
The introduction of Google has changed that picture, giving greater visibility to small- and medium-sized marketers and enabling them to compete alongside big retailers. A hefty promotion budget is no longer a requirement. As long as you have a solid product and consumers can locate it via a search engine, you're in the running for a share of the revenue. It is no longer possible to 'buy your way to the top' -- relevant advertising that engages consumers is key.
But, it's not necessarily that simple. The sheer volume of both Google users and queries makes being able to locate a retailer's products quickly and easily a top priority. A high ranking on Google, either through paid placement or organic listings, could be seen as the modern-day equivalent of securing a plum spot in the Sears Roebuck catalog -- once considered a do-or-die for merchants looking to sell their products to consumers.
Marketing and merchandising: getting more, spending less
Over the last decade, many retailers have come to understand the vital role Google plays in their businesses' bottom line and have adjusted their marketing and merchandising models accordingly.
On the marketing end, there has been a noticeable shift of ad dollars away from print and television media toward online advertising. Glossy magazines and newspaper circulars, once considered advertising staples, have given way to Google AdSense ads that require smaller initial outlays and elicit a more measurable return.
When it comes to merchandising, Google (and similar engines) presents retailers with the unique opportunity to showcase product lines in entirety rather than winnowing lines down to a few top sellers. The targeted nature of search advertising, which relies on a direct dialogue between the searcher and the marketer, is what makes this possible. The user enters a query and in return receives advertising relevant to those specific search terms. If a user wants something, no matter how specific, and it’s being sold on the internet, Google can find it.
In simplified terms, this form of merchandising offers less risk and less waste to retailers. The intense competition and low profit margins inherent in this industry have made 'Googlization' necessary in order to ensure business survival.
Not just the medium, but the message
The changes Google has wrought are not confined to just marketing and merchandising itself, but also the messaging contained therein. While branding continues to be of vital importance online, marketers that previously relied on the strength of their brand alone have been forced to adopt a more promotional, price-oriented strategy.
Such an approach takes into account the newfound ability of consumers to find and examine multiple products and services side-by-side. Everything from shipping costs to rebates and add-ons can be used as a point of comparison. A number of sites dedicated to this purpose have sprung up in the last several years, from shopping search tools like Froogle to comparison engines such as PriceGrabber.
Marketers have had to adjust their ad copy to include more price points, time-sensitive promotions and action-oriented copy in order to make their messaging stand out and win over the undecided consumer. It's no longer about who has the flashiest marketing, but rather who can answer the fundamental consumer question: What's the benefit of buying the product at your store versus someplace else?
The new shopper: information and empowerment
Speaking of indecision, although few would give up the ability to complete their holiday shopping from the comfort of home, it's safe to say that the search medium has caused a fair amount of confusion. Google has exposed consumers to an enormous number of options and it can be difficult to determine what to buy and from whom.
Luckily, the same medium that creates the confusion is also the one that helps solve it. The viral, social networking nature of the web has given life to a wealth of consumer-generated content that helps shoppers make sense of all the options available.
The content comes in the form of product reviews, wish lists, 'Top 10's and blogs dedicated to specific brands and products. Rather than learning about the product solely from the marketer itself, Google has made it possible for users to learn about the products from each other.
The end result is a more informed, empowered consumer. Not only are they able to shop around for a better price and a better product, they're also able to exert a real influence on the retailer themselves.
For example, if a consumer buys Product X and winds up dissatisfied, she may post about the experience on her blog or personal site. If the story gets enough exposure (and it doesn't take much) it will climb towards the top of Google’s search results for the company and/or product name, spreading the negative message. This is something no marketer wants and gives companies a real incentive to make things right with the individual.
Innovation driving innovation
In the end, the innovations that drive Google forward are the same ones that will drive retail forward. The structured data that is characteristic of the retail sector (standardized files containing product names, prices, images, descriptions) lends itself well to the technologies rising to the forefront of search, including product feeds and XML.
Through this we see product data being transformed into a marketing tool: Customers may not know your product by name, but they'll be able to find it thanks to the transparency search engines and shopping tools provide.
This is all part of the metamorphosis of retail into an open source environment. Both consumers and retailers will be able to customize product information and have it returned in whatever method is most convenient to them.
And that's an easy sell for everyone.
Joshua Stylman and Peter Hershberg are managing partners of Reprise Media. Stylman oversees all aspects of the organization, from technology and product marketing to media management and sales. He calls on more than a decade of experience in building and diversifying revenue streams for new media companies.
Hershberg is responsible for overseeing the technology, sales, client services, media, and product marketing of the entire organization. Prior to co-founding Reprise Media with Stylman in 2003, Hershberg spent more than 10 years in the interactive space in a series of consulting and management roles, specializing in technology and media.
