Shopping Blog

We know this is a challenging Holiday Season for both merchants and consumers, but, despite consumer concerns about the health of the US economy, predictions of growth in e-commerce spending represent a significant opportunity for retailers to reach active shoppers. Forrester Research projects that online holiday sales will grow 12% over 2007 to a healthy $44 billion even as same store sales remain flat. [1]

Shopping drivers of convenience, selection, and perceived value will continue to attract buyers to the Web this holiday season - over 91% of online shoppers plan to purchase the same number or somewhat more gifts online this year.[2]

To maximize the value of your marketing dollars, we wanted to offer some relatively simple best practices for converting cost sensitive consumers:

·Sweeten the Deal by Offering a Holiday Perk in Your Ad Text: Frugal shoppers want to find the best overall value online – regardless of whether you typically compete on price, you still might consider sweetening the deal with complimentary gift wrapping or shipping.

·Consider Removing Negative Keywords like ‘Free’ or ‘Discount’ From Search Campaigns: While normally, some retailers benefit by filtering out users looking for discounts, this may prevent your ad from showing to value-seeking consumers who may inadvertently wind up buying from a higher cost competitor. To do this effectively, you may want to use negative exact match keywords like ‘-[Free "brand name" Purse]’, which filter out unnecessary clicks as you likely don’t intend to give away a free purse, without preventing your ads from showing to potential buyers who are hoping for ‘free shipping’.

Visit the AdWords Help Center section on Keyword Types to learn more.

·Increase Profits by Offering Discounts that Encourage Shoppers to Buy More: Consumers typically need to buy multiple gifts at this time of year and you want them to purchase presents for multiple people on their list when they visit your website. Consider an offer such as ‘buy two, get the third 30% off’ rather than offering 10% off per single item; you offer the same savings per item, but encourage volume purchasing. As an additional benefit, if the shopper’s mother, daughter, and sister all love their new sweaters, you’ve managed to kill two birds with one stone by spreading your brand as well.

·Avoid Major Site Changes: With value-focused users visiting multiple sites before making purchases, they may visit your site a few times before making a purchase. To avoid confusing them, make sure they can use the same navigational path to complete purchases.

·Employ Values Marketing: With a reduction in consumerism comes a cultural shift that breeds a focus on self-sacrifice, reassigned priorities, and a return to those things that really matter. Shoppers are spending more time at home this season and spending time with family and friends. Advertising that echoes consumer priorities is more likely to breed an emotional connection with your brand - increasing both conversions and brand loyalty.

·Engage in Successful Price Discrimination by Targeting Promotions Based on Search Behavior: If you are a branded retailer, you're likely have a segment of your customer base searching for promo codes for use in your online store or coupons to bring with them into your brick-and-mortar location. Consider building a landing page specifically targeted to this search behavior - you'll to show your cost-conscious brand enthusiasts that you've anticipated their needs and further increase brand loyalty.

Posted by Yael Davidowitz-neu, the Google Retail Team

I spent my first 4 years at Google aggregating "Retail best practices" and sharing them with advertisers. During this time, the majority of these "best practices" were focused on driving greater cost effective e-commerce. Over the years, retailers and their marketing partners/agencies have become more open to ideas of cross-channel inclusion and testing.

Over the last year, I've shifted my focus a bit. While there is so much that marketers CAN DO in online advertising - I feel like we online marketing enthusiasts sometimes become blind to what we SHOULD DO. In this vein, I've tried to focus on what Retail marketers do in other media channels - so we can apply those concepts to the online marketing channel without re-inventing the wheel.

I've often asked the question - "What works for Big Box Retailer X?" The answer .... "Circulars" Why do retailers love circulars? ... Some (and not all) reasons include:

They work! Retailers (and manufacturers) can track on a local level the sales lift of products in circulars and compare to the cost of the circular - which almost always shows a positive return - and most importantly - moves large volumes of product.
Consumers find value in them - Research shows that consumers still love their Sunday FSIs.

• Costs are usually shared between retailers and their manufacturer supplier.

The conversations I have with retailers are not about how they need to SHIFT marketing dollars away from the circular and into digital media merely because of media consumption trends. Conversations I try to have, especially in these economic times, are about optimal merchandising that will net the best, accountable sales results...and in the online channel - I believe there is TREMENDOUS opportunity... The paid results you see are what I'm calling "The Virtual Aisle" or "The Virtual Shelf Space." I like to equate this to walking into a store and asking the clerk where they sell printers. In most cases, the clerk will say (for example), "Aisle 7." As you, the consumer, approach aisle 7, you will often be greeted by an "end cap" merchandising display, usually promoting manufacturer brands (that are funded by these manufacturer partners). Additionally, when you walk into aisle 7, the top-to-bottom shelving order is often based on merchandising relationship with manufacturers as well. In the online world - there are very few "Virtual End caps" to point to.

If manufacturers want to reach consumers who come to "aisle 7" - I can't think of a reason why they wouldn't want to reach a much larger audience of extremely qualified shoppers (people searching thousands of variations of the keyword "printers"). Furthermore - when retailers reach the consumers looking for printers - I believe their is an untapped merchandising expertise that can lead them to more creative ways of driving sales than the message: "Find Printers at Retailer X"... For e-commerce - that messaging works, but e-commerce only represents 6% of total sales. The internet effects a lot more than 6% of sales (89% of shoppers say they use the internet before purchasing products*) - but the digital merchandising to date has not matured to this story - and again - this is what I talk about around the enormous opportunity...

Posted by Brett Goffin, Google Trade Promotion Team

Unemployment is up, Consumer confidence is down, is this really the season to be jolly?! If ever we needed retail therapy its now! And shoppers have gone to the couch in huge numbers…with laptops in hand. Google search driven traffic is up nearly 30% over last year in categories like Home Furnishings, Home Improvement, Consumer Electronics and Jewelry and Watches. Even Apparel and Office Supply search driven traffic is up almost 25% year over year.

If predictions by the National Retail Federation ring true the forecasted holiday sales growth in Retail overall will be hovering around 2%. But for online retail the outlook is a bit more festive with Forrester Research predicting retail sales this holiday season will grow 12%. Online will play a role in 86% of the upcoming holiday shopping season both as a research tool and to make purchases; beating out "in-store" (54%) 2008 Google/OTX Holiday Shopping Intentions Study . According to the latest Internet Retailer survey, 81% of retailers believe their holiday web sales will grow this season. Shop.org reports, in their 2008 eHoliday Study conducted by Shopzilla, that 56% of online retailers expect their holiday sales will grow at least 15% year over year.

So what can retailers do to channel Dr. Phil? Shoppers are beginning their holiday research and shopping earlier this year so make sure your sites are ready to accommodate the increased traffic. Free shipping and promotions are already in full swing. To ensure you are there when and where shoppers are looking for you don't cap your search budgets (would you close your doors at 2pm because there were too many people trying to enter your store -- we know Dr. Ruth wouldn't). Consumers are expected to spend more time researching this holiday season, so give these info hungry shoppers everything they need. According to Shop.org, 33% of retailers have added reviews and 43% have added video to their sites. If you have product videos load them up on YouTube, its free and a great way to reach consumers. Lastly, if you are reading this post you are probably already know all about search but don't ignore the power of display advertising. Search is great and Display is great but together they are like Frasier and Niles.

Posted by Paulita David, the Google Retail Team

Did you know that YouTube is the second largest search engine on the web, after Google?

YouTube Sponsored Videos now allows marketers, content partners and users to take advantage of the YouTube search functionality by promoting their content in a dynamic auction-based marketplace. Similar to Google AdWords, YouTube Sponsored Videos leverages keyword targeting and Cost-per-Click bidding within YouTube search results.

To promote their back-to-school penny product sale, OfficeMax created a series of eleven hidden camera videos in which pranks are pulled on unsuspecting strangers. With just six weeks to drive buzz and awareness before the back-to-school season came to an end, OfficeMax did not have time to let an audience form organically over time. To drive immediate awareness of their videos and generate viral views, OfficeMax participated in the beta release of YouTube Sponsored Videos. When users searched on “OfficeMax”, “funny pranks” or “penny pranks”, for example, an OfficeMax ad appeared next to search results, directing the user to watch the video.

Watch the OfficeMax video case study to learn more about the success of the “Penny Pranks” campaign and the power of YouTube Sponsored Videos.

For more information about YouTube Sponsored Videos, visit: https://ads.youtube.com/

Posted by the Google Retail Team

Have you reached nirvana?

Two weeks ago we debuted Part I of our five part video interview series with Avinash Kaushik, Analytics Evangelist. The post received very positive feedback and we are excited to share Part II of V with you today.

The interview focuses around the theme of online activity driving in-store sales and how retailers can measure this impact. In part II Avinash continues to share pertinent recommendations for measurement including the “holy nirvana” of measurement.

Posted by Emma Weisberg, Google Retail Team

Over the past few posts we have been examining the impact that online has on in-store sales. So far we have approached this from a few angles; measurement and testing methodology. Today we are going to approach the topic from another angle; custom research.

Ken Cassar, VP of Industry Insights at Nielsen Online, has joined us to share the findings of his report called "Pinpointing the Value of Multi-Channel Behavior". For the research Ken used Nielsen's online and Homescan panels which allows Nielsen to track online website visitation as well as actual offline purchases. Therefore, Ken was able to measure the effect of website visitation on offline sales and to better understand the role of the Internet in both high consideration and low consideration purchases.

Please watch the video interview below and you can download the report here:

Posted by Emma Weisberg, Google Retail Team

Last week we heard tips from Analytics Evangelist Avinash Kaushik on how to measure the in-store impact resulting from online investments. Today we are continuing in this vein and discussing ways for retailers to test the online-offline impact for themselves.

The average American spends as much time on the Internet as they do watching TV (31 percent of total media consumption is online, Source: Jupiter Research/Ipsos Insight Entertainment and Media Consumer Survey, 08/07, US online consumers only), and yet advertisers only spend around 6 percent of their total media spend on online advertising. One big reason for this, at least in the retailing world, has been the difficulty of showing how online advertising affects consumer purchasing behavior in stores.

According to a study done last year by Yahoo! and comScore, 89 percent of consumers look for information about products online. While selling products online is a great source of revenue, perhaps the true value of online advertising is its effect on what consumers do in store. So how can you figure out the effect that your online advertising has on offline purchases?

One of the most common methods is to look at the individual consumer. This can be done through online coupons, credit card tracking, individual surveys, or Nielsen's HomeScan tracking data (where people who opt in, physically scan products they buy using a bar code reader in their home). Although the individual consumer method can surely provide interesting results, it is often too difficult and too expensive for most advertisers.

Another approach that seems to be more scalable is randomized test and control, which is similar to the method used for FDA drug testing. The three basic elements are designing the test, running the rest, and analyzing the results. The design is perhaps the most important element, because if your design is poor the results will be meaningless. Although this method can have dozens of variations, I'll give a simplified over view of the design to get you thinking about how you can measure the online/offline impact.

First, you would choose cells, each with multiple metropolitan test areas. The test areas should have similar attributes – population, sales, etc., and each cell would be exposed to different variations of advertising. Here is one possible design:

Cell 1: No online ads in test product categories

Cell 2: Existing online ads, no change from campaigns prior to test

Cell 3: Max out Google Search and max out potential keywords, but use no Display

Cell 4: Max out Google Search and layer on Display ads to boost reach

A few things to consider are the timing, the product categories that are tested, the number of test areas, and the spend level. You should try to avoid testing when there is a lot of other noise, such as seasonal promotions and holidays. The product categories can also have a big effect on the test. If you choose categories that typically have big revenue numbers it is more difficult to see changes caused by your test, so it is usually better to pick categories with smaller sales numbers. And lastly, the number of test areas and the amount spent on the test go hand-in-hand. If you choose too many test areas your testing dollars will be spread very thin and it will be difficult to make an impact. But if you choose too few test areas the test won't be statistically significant. So it is important to pick a middle ground that allows you to put a significant amount of testing dollars into each test area.

Online product research has become an integral part of the consumer shopping experience, and your online presence surely contributes significantly to your ROI beyond what is sold online.

As Jeff Smith of Accenture Retail said, "Instead of replacing bricks and mortar stores, the Internet is an extension of consumers' in-store shopping experience providing a resource to research product and price. Retailers and manufacturers must understand this consumer behavior trend in order to reach shoppers, educate them, serve them and earn their loyalty."

Now you just have to test it for yourself.

Posted by Google Retail Team