Working Lunch Report: The Evolution of Ecommerce: Google Shopping and Buy Buttons

The Ecommerce Club’s August 19th Working Lunch London, hosted by Net Media Planet, took at look at how ecommerce is evolving. There are massive changes taking place in the way in which customers may be able to buy, and it’s the goal for marketers to understand where those changes are taking place and what advantages and disadvantages those change can provide.

Several platforms including Google, Facebook, Twitter and Pinterest are turning their online communities into a potential retailer’s haven with the launch of the “Buy Now Button.” This solution is relatively new and is constantly updating and changing.

According to Damien Bennett, Head of Strategy at Net Media Planet these new options target the more traditionally opaque parts of the path to sale. This is critical for marketers, who need to be able to justify their budgets, and new sales channels and attribution models can make that worthwhile.

For marketers the top of the funnel is easy to justify, because it’s visible. The bottom is relatively easy as it seems fairly transparent – you pay for what you get. The middle of the funnel is not as transparent, nor is it that visible, but today a large proportion of what’s on offer to marketers lies in the middle of the funnel.

 

  1. The Path to Sale

challenge

For Bennett, the key to the successful use of the middle of the sales funnel lies in getting the attribution right, and in ensuring that agencies are actually using the model that a brand puts in place. He sees Buy Buttons as a potential means to solve this attribution challenge.

The majority of interest in Buy Buttons at the moment seems to lie in mobile. Google, for example, has said that it’s offering buttons on mobile as it’s a channel that has historically been poor on conversions. The buttons that its trialling take the consumer to a Google hosted platform that allows the consumer to transact through their Google account.

There is little doubt that the ability to build conversions through mobile could provide a massive benefit for online retailers in the short term. There is a lack of clarity however  about how the service is expected to work out over the long term. Questions must be asked with regard to flexibility in the ads themselves, how logistics will be managed, what merchandising (if any) is possible. If the transaction is to take place through a Google account, at the very least the brand is sharing customer data with Google, if not running the risk of losing it altogether.

The challenge for retailers is trying to work out which path to take. Can you run the risk of avoiding integration with other platforms, as some chose to do with Amazon, or will that end up losing a valuable source of revenue? With UK shoppers spending £2 out of every £5 on Amazon, and its position as the defector product search platform, what should retailers do next?

What’s important is that decisions are made in context – what do your customers do, are they likely impulse purchasers or do they have a long purchase cycle? Is your product digital and be bought and downloaded immediately, or is there a more complicated delivery process involved, such as in the car industry? What’s the price point, what’s the hook, what do you, as a brand, want to gain?

  1. Pros and Cons

pros and cons

At the moment, evidence on the performance of Buy Buttons is anecdotal, but as platforms increasingly deploy them the questions continue: who controls the content (not just sharing of data but how much control does the brand have on the platform), and what happens if the platform changes the rules change mid-season?

Members of the Club attending the lunch definitely had more questions than answers. Some wondered if the experience with Google Certified Shops and the changes that took place would cause some brands to hesitate to engage when the Buttons become available to UK customers.  While the new Buttons are being charged on a PPC basis, at some point a percentage of the transaction fee might be considered. There was more than one voice concerned that history suggests that Google is happy to change the rules once retailers have committed.

The big issue for members, as always, came back to data, and many consider Facebook to have the most interesting opportunities for retailers. As a platform, it certainly has the most information about potential customers. It knows users personal data, their propensity to act and, as it’s plugged into so many different apps, it can analyse across a swathe of third party data as well. That means that it’s the platform most likely to enable a flawless customer experience through improvements in context and relevance.  The challenge that it will need to overcome is whether or not users will want to be targeted when socialising – something that is as yet unclear.

There has been a lot of excitement about the use of Buy Buttons on Pinterest, but some voices suggest that given Pinterest is part of a process rather than a specific target, it may prove less effective. Yet consumers who plan Christmas and birthday lists on the platform seem to vehemently disagree, and seem to view its potential as the beginning of the self-curated shop. Its strength perhaps lies in its ability to be category specific – it’s for wedding or party planning, presents etc.

What most agreed upon were the flaws in the existing ways that we measure data. Conversion rates may be down but does that matter if transaction values are up? While many customers use smartphones and tables to browse, many want to complete on a desktop – is that a generational thing and something that we need to plan for passing?

What’s expected is that mobile behaviour will begin to change as the mobile experience improves, and the integration of commerce buttons into already popular platforms could be the first step to the evolution of that behaviour.