Google Shopping

Speculations on the Future June 2014

#SMX

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Mercent Retail: Ensures the world’s leading retailers are visible, competitive, and

profitable wherever consumers shop

Catalog Inventory

Price

Optimize dynamically: Assortment

Content Bids Price

Paid search

PLA

CSE

Local

SEO

Marketplaces

Retailer

#SMX

Google Shopping is growing faster than

Amazon Same Store Sales Y/Y Growth %

0 %

20 %

40 %

60 %

80 %

100 %

120 %

Google Shopping Amazon Marketplace

#SMX

PLA has grown relative to “traditional”

paid search . . .

Comparison of Google Shopping to SEM Ratios

0 %

10 %

20 %

30 %

40 %

50 %

60 %

Sales Ratio Ad Spend Ratio

#SMX

. . . The impact is showing as Google

Shopping grows share of sales

Trifecta Stores, Channel Sales Distribution

67% 62%

58% 53% 52% 51% 52%

44% 43%

14% 20% 26%

28% 27% 31% 32%

38% 42%

19% 18% 16% 19% 22% 18% 16% 18% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2

Shopping

Google Shopping

Amazon

#SMX

Imagining the future

of Google Shopping

Speculating how

Google will satisfy

stakeholders

What consumers want What advertisers want

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

Low prices

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

Low prices

Trusted fulfilment

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

Low prices

Trusted fulfilment

Fun, enjoyment, surprise

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

Low prices

Trusted fulfilment

Fun, enjoyment, surprise

Personalized touches

#SMX

What consumers want?

Buyers

Treasure hunters

The right product

Low prices

Pleasant browseability

Trusted fulfilment

Fun, enjoyment, surprise

Personalized touches

#SMX

What advertisers want?

Digital end caps

#SMX

What advertisers want?

Digital end caps

Efficient placement

#SMX

What advertisers want?

Digital end caps

Efficient placement

Differentiating experiences

#SMX

How do you prepare for the future of PLA?

DISCLAIMER

The following speculations of where PLA may go are strictly mine.

No endorsement by Google.

#SMX

1. More data – more

opportunities for structured

data to be leveraged in faceted

search and personalization

Takeaway:

Structure your data. Send more data. Make your products different. Your differentiation

is in your feed; not your bids.

#SMX

2. Buyable child variations

to be required to improve

customer buying

experience

Takeaway:

Structure and send variations. Send data more frequently. Integrate with Content API.

#SMX

3. New experiences that provide

easier price comparisons

Takeaway:

Start measuring price competitiveness. Test price aware bidding strategies.

#SMX

4. More Fulfillment by Google . . .

#SMX

4. More Fulfillment by Google . . . Or a data

certification that is fulfillment certified by

Google

Takeaway:

Continually improve fulfillment and customer service. Plan for next day delivery. Plan for

how to expose your metrics.

#SMX

Price competitiveness relative to competition?

5. Price competitiveness metrics in AdWords

. . .

#SMX

5. Price competitiveness metrics in AdWords

. . . and more merchandising-like opportunity

suggestions

Add more popular products

The most popular products in your category have these attributes . . .

Reduce price on some products

You’re significantly over-priced on these products. Considering price on these products to increase click through rate

Add cross-sell opportunities

Takeaway:

Train your merchandisers on PLA and AdWords (and Mercent )

#SMX

6. RLSAs will come to

PLAs

Takeaway:

Test and use RLSA. Prepare for extension to PLA.

#SMX

7. New advertising programs for brands . . .

like Brand Registry

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7. New advertising programs for brands . . .

like a ‘boost’ programs to facilitate COOP and

MDF funded programs

Product relevance

Retailer bid

Brand boost

Takeaway:

Strengthen your relationship with suppliers/retailers. Talk now about how to

cooperate as new programs available.

#SMX

8. Mobile

experiences

become

pleasant –

putting the

best window

for window

shopping

into your

hand

Takeaway:

Provide or plan to provide local store inventory and prices to Google (and others).

#SMX

Summary

Expect PLA to get more “commerce-like”

– Prepare your data

– Prepare your organization

– Strengthen your supply chain partnerships

#SMX

Thank you

Frank Kochenash

Vice President, Product and Services

Frank.Kochenash@Mercent.com

206-832-3931