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Google struggles to find mcommerce strategy that clicks

July 30, 2013

Google wants to play integral role in mobile commerce

Paid search and commerce go hand in hand, something Google is very aware of. However, the company’s mobile commerce and payments strategies so far are not catching on with consumers.

With mobile growing quickly, Google wants to boost its central search business by providing shoppers who are researching products and looking for nearby retailers with additional services such as price comparison tools and ways to pay for purchases. Recent moves such as the decision to shut down the Google Shopper app suggest the company is still looking for the right solution that will click with consumers.

“For Google, mobile payments, mobile commerce are really critically important,” said Greg Smith, analyst at Sterne Agee, Birmingham, AL.

“If you think about advertising, there is a shift going from traditional print media advertising to the Web, one of the things that becomes more critical is being able to tie the actual advertising to the consummation of a transaction,” he said. “If you can prove that somebody followed an advertisement and then purchased the product, that is kind of the Holy Grail – you can directly prove that return on investment from that advertising.

“Just think of a world where Google were to miss that trend, it would be potentially catastrophic.”

Path to purchase
Last week, Google said it would shut down the Google Shopper app, which enables users to scan products or use voice and text search to compare prices for products.

The services will be integrated into Google’s search apps, with product reviews, photos, details and other information being a part of these apps going forward.

Using a mobile device to compare product prices while inside a store is a popular mobile activity with consumers, with 58 percent of adult smartphone owners and one-third of all adults in the United States showrooming regularly, according to a recent report from parago. (see story).

As such, price comparison services are an important way for companies to insert themselves into the path to purchase as mobile continues to play a larger role throughout the entire process.

Buy with Google button enables two-click payments

However, Google’s price comparison services have not gained much traction with consumers. In fact, Amazon is used twice as much as Google for comparing prices, according to parago.

Since Google’s search services are already popular with mobile users, the company hopes to drive use of its price comparison tools by integrating them with search.

Google also announced a new Zagat mobile app for Android and iPhone yesterday, featuring news and video content from local editors and curated lists to help users as they look for nearby restaurants.

Google acquired Zagat two years to enhance its search results and better compete with Yelp, which has not really happened so far.

Mobile payments
Google is also making new moves to build its mobile payments strategy.

The company recently started sending email invitations to its Gmail customers to start using Google Wallet to securely send money to friends and family in the United States without leaving their Gmail inbox.

Google Wallet is the company’s attempt to play a role in mobile payments, which are expected to growing significantly over the next few years.

However, Google Wallet has not been catching on with consumers, in part because there still are not many NFC-enabled phones in consumers’ hands or retailers that accept contactless payments.

Despite Google’s struggles in mobile payments, it is likely to continue to try new strategies until it finds one that clicks with consumers because of how important payments are to its overall mobile strategy.

“They have obviously tried a lot of things with the Google Wallet, and they do not appear to have any traction, quite frankly,” Mr. Smith said. “There are a variety of reasons for that.

“We are going to continue to talk about Google in the context of mobile payments,” he said. “We are sort of waiting for what is the next iteration of Google Wallet, and we don’t know what it is going to look like.”

Closing the loop
With in-store adoption of mobile payments moving along slowly, Google is focusing on a broader digital strategy, including supporting purchases made online either from a desktop or mobile device. This positions Google Wallet as a broader payments alternative along the lines of PayPal.

For example, a couple of months ago Google introduced the Buy with Google button, enabling customers on participating retailers’ Web sites to pay with Google Wallet in just two clicks. To support Buy with Google, merchants such as Airbnb, Expedia, Priceline, Rue La La and others are offering promotions to users who checkout using Google Wallet.

Buy with Google is the company’s attempt to replace Google Checkout, a service for making online payments with a Google account, which is being shut down later this year.

Google Checkout was never widely adopted, but the company is hoping that Google Payments and Buy with Google will do better.

“It is not just mobile payments, but mobile commerce and being able to close the loop between an ad and the consummation of a transaction – that is very important,” Mr. Smith said.

“It ultimately may not have to be the actual payment [for Google],” he said. “That was a way for them to collect significantly more data, just because you know exactly what consumers are purchasing.

“Is the actual payment component critical for Google – not necessarily. But I think they will continue to try to become integral within payments in one form or another.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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One Response to “Google struggles to find mcommerce strategy that clicks”

  1. Retailigence Corp Says:

    Google’s experimentation provides learnings that Google to hone-in on what’s best for Google. Must be frustrating for thousands of consumers and retailers who have invested time and/or money in the now shut-down Google Shopper App infrastrucutre, the now shut-down Google Search API for Shopping, and other future tools. Seems we need to start looking at Google as a vertically integrated, closed-system. Bad for industry innovation but good for alternate providers of open shopping infrastructure tools for in-store product availability, payment solutions, etc. For the benefit of innovation and innovators, I vote for “open”.

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