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What is Google Shopping & How Does it Work?

Google Shopping header image
Google Shopping header image

Updated for 2023.

Back in April 2020, Google announced Free Google Shopping Results. This allows anyone with a website or online retail business to place products on the company’s shopping platform for free.

The California-based search giant opened up the market, helping retailers connect with their audiences and lowering barriers to entry in order to better compete with companies like Amazon. It hopes that eliminating fees will open up its platforms and encourage a significant number of businesses to want to sell their products on the internet.

Google does not generate revenue from the free listings, but it will make money by charging for advertisements and featuring promoted products, as it does on other services.

What is Google Shopping?

What Is Google Shopping?

Google Shopping is now a free platform (since April 27th 2020), offered by Google that allows users to search for, compare, and shop for physical products in its database. Google Shopping results are shown to the user separately to the normal organic search results and are in effect its own shopping database which you can explore. Shopping results reflect the closest match to the user’s search terms, with paid promoted products appearing separately from free organic results. Google Shopping experts can leverage this platform to help supercharge their sales, and we’ll help you understand how to do this too!

The History of Google Shopping

Google Shopping was initially called Froogle and was little more than a search facility. Users would type in the name of a product and then see a bunch of links to related websites.

Over time, however, the company improved the format to offer an alternative to eBay and Amazon. Google made it easier for shoppers to compare items and prices in its databases. Then, in 2012, it moved to the paid advertising model. From that point onwards, the platform became an extension of Adwords – a paid advertising service eCommerce retailers could use to reach out on its platform.

Utilization rates, however, flagged in recent years due to the barriers to entry. Firms must pay high costs to appear on the platform, discouraging use.

With changes in the global economy due to the Coronavirus pandemic, Google re-introduced effectively what was known as Froogle by restoring free Google Shopping results on April 27th 2020. The new system reverses this trend, by providing users and retailers with more options, something the company hopes will grow the ecosystem.

Google Shopping Statistics

There are some interesting statistics you should know about Google Shopping:

  • 85.3% of Google’s paid clicks are generated on Adwords and Google Shopping
  • Shopping ads in the US drive 76.4% of retail search spend
  • Google Shopping ads in the UK amounts to 82% of retail spend

How Does Google Shopping Work?

How Does Google Shopping Work?

There are thousands of eCommerce stores out there, but the average consumer doesn’t know about them. Even major brands, like Etsy, remain unknown in some quarters.

Google Shopping, therefore, is a way for companies with great products to gain visibility acting as an e-commerce aggregator. Or, as Google puts it: Google Shopping “makes the world your storefront.” Retailers that use the service suddenly gain access to the search giant’s enormous user base, potentially enhancing their sales.

Before the big announcement that Google Shopping would permit free product listing, companies paid a fee to place products on the platform. The recent changes, however, allow you to list your entire inventory for free. Your products will then become searchable through the platform across the world. The service is now open to all retailers (after a policy change in 2019).

The format will be slightly different from how it appears now. Paid ads will appear at the top and bottom of the page – as they do for regular search – with unpaid “organic” results showing up in the middle.

This setup mirrors the Google Search approach to PPC. But there’s no reason it has to remain this way. The company may jettison the format for alternative arrangements in the future. Amazon, for instance, sprinkles sponsored results throughout its search results and so the California search giant may follow suit.

Last year, Google updated Shopping with personalized recommendations based on user data and characteristics. The revamped experience provided essential features such as local inventory and smoother checkout. The good news is that these features will remain. The company says that it will incorporate them into its new pages, providing an enhanced service it hopes will better compete with Amazon. Users will see curated product pages (as they do on many other eCommerce platforms), showcasing specific products, such as electronics or home and garden.

How Does Google Shopping Work?

Uploading free products will be similar to uploading paid promotions. The Google Merchant Center will now include an option for free product data alongside paid campaigns. These will then appear in results, just like paid ads.

Getting started is easy. If you’re an existing user of the Merchant Centre and shopping ads, you may already be a member of the “surfaces across Google program” – a system that displays your products across Google touchpoints, including text search, image search, Google Lens, and the Google Shopping tab. You should be able to automatically benefit from the new unpaid experience by simply following the wizard.

If you’re not a member of the surfaces across the Google program, you will need to opt-in. To do this, go to the “Growth” tab on your Merchant Center dashboard and select the “Manage Programs” in the navigation menu. Select the “surfaces across Google” program card, and you’re done.

For those of you who have not yet signed up for Merchant Center, Google is working hard to streamline the process and will roll out enhancements throughout 2020. While anyone can, in principle, sign up to list products on Shopping, Google still requires that retailers jump through some hoops. You will, for instance, need to prove to the search giant that you have unique product depth and that you can offer its users genuine value.

Fortunately, Google allows you to opt into surfaces across Google during the sign-up process, allowing you to start your product feed today.

What Is Google Shopping useful For?

Google Shopping is a powerful platform that serves your business in multiple ways. Let’s dive into some of the benefits of using Google Shopping for business below.

Higher Search Volume

Here’s the short answer for why businesses use Google Shopping: traffic, traffic, traffic!

Google is the largest search engine in the world, serving over 90 billion search inquiries every month. In many ways, it IS the internet and the first port of call for most users.

Contrary to popular opinion, Amazon does not have a total monopoly on eCommerce. Thirty-five percent of shoppers begin their search for products on Google. And with the changes announced here, this figure is likely to rise. As news of the improved Shopping experience trickles out, consumers will naturally shift their behavior, thus benefiting online retailers.

Better Traffic Targeting

eCommerce retailers know that higher traffic doesn’t necessarily mean more sales. For this reason, you need to target people with the money and inclination to purchase your products.

Google Shopping, therefore, is an attractive platform for online retailers. It provides you with a clear route to finding people with the intent to purchase your products. Contrary to regular search, you can be reasonably sure that those typing terms into Google Shopping are looking for products. If not, then why else would they be there?

Furthermore, Google Shopping will allow you to target your advertisements better to cater to specific markets. So, for instance, if your niche is “mountain bikes less than $1,000,” you can target it specifically.

More Clicks

Google Search pay-per-click links typically attract around 20 percent of the total volume of traffic. The remaining 80 percent goes to the organic results, even if they are less relevant than the ad.

The reason for this effect is simple: consumers have learned over the years that organic pages are generally more trustworthy than their paid counterparts. Getting noticed on a regular search, therefore, is a challenge.

The setup of the Google Shopping platform, however, is different. Here, the majority of results that appear on the first page are promoted products. If users want to find organic results for their search terms, they need to click through to the second or third page. Most don’t bother.

For this reason, paid click-through rates tend to be higher on the platform. Add to that the fact that Shopping displays both the product thumbnail and price upfront, and the platform’s traffic-generating ability is even greater.

Increased Reputability

Because of how Google Shopping works you appear in Google’s dedicated results feed. This means you naturally acquire some authority by association as you have put in the effort to have your products listed there.

Google Shopping aggregates products from across the web, so you’ll likely be appearing alongside big-ticket sellers and legacy brands, enhancing your own legitimacy and authenticity in the eyes of potential buyers.

How to Sell on Google Shopping?

While there are third-party platforms that help eCommerce businesses automate the Google Shopping experience, many companies still choose the manual route (uploading ads and free product feed themselves).

Getting Started

Sign Up To Google’s Merchant Center And Add Products To Google Shopping

As discussed earlier, unless you’re a member of the Merchant Center, you’ll need to sign up before you can benefit from the full Google Shopping experience.

How To Sell On Google Shopping

First, you’ll need a legitimate Google Account (like Gmail).

Then you’ll need to enter your business information. Google collects this to determine what your company offers and whether you’re a suitable candidate for the platform.

You’ll need to enter details such as your website name, business display name, and the countries in which you operate. The business name you choose will become the username of your Merchant Account.

After that, Google will prompt you to send a file to your website server to confirm that you own the site.

Following that, you can then log into your Merchant Center account and manage your listings (which we discuss in the following section).

Purchasing Ads

In the past, Google Shopping listings were paid-only. With the April 2020 changes, businesses in the US will have the option to list products for free, with those in the rest of the world following soon after.

Paid ads, therefore, will now appear at the top and bottom of the page, alongside organic results. These will contain what Google calls “rich product information,” such as the price of a product, your business name, and a thumbnail.

To create a paid campaign, you’ll need to link a Google Ads account to your Merchant Center. Google provides you with information on how to do this, depending on your situation.

Once you have an account, you’re free to “create a campaign.”

Click the campaign and link your Google Ads to your Merchant Center account. Then, select the type of campaign you would like to launch. Click Shopping” and then continue to create ads as you would usually.

How To Create a Google Shopping Feed?

Your Google Shopping feed is just the data Google uses to display rich information about your products. The search giant doesn’t manually create product listings on behalf of retailers. Instead, it uses algorithms to pull data from your website and then uses these in Shopping results.

It is critical, therefore, that eCommerce companies optimize.

Google Shopping is primarily a visual experience. Your priority, therefore, should be to make high-quality images available. Google may reject campaigns if you supply low-resolution photos. For more information, you may consult the company’s product image guidelines.

Once you’ve optimized product images and text, it is time to collate all the material and enter it into your product data feed. Here, you tell Google about your products in a standardized format so that it can use the information to display your products in Shopping results.

In the Merchant Center, go to Products and then click Product Feeds. Click the round, blue “plus” icon to open a page where you can enter basic information. Here, you input things like your country and language and the demographics to see your products once they go live.

How To Create A Google Shopping Feed

In the next section, you enter product information and how Google Shopping will display it. You can upload all of your products manually, but if you have a large inventory, this is impractical. Google, therefore, provides you with the option of entering data using Google Sheets. You’ll need to rig the document to conform with Merchant Center guidelines (or use the template provided). But once you’re done, updating your product inventory will become much smoother.

Here’s a rundown of the information you need to include:

* Product ID. The product ID is the unique SKU assigned to most products. Some products, such as crafted items, do not have internationally-agreed SKUs, so you may need to create these.
* Description. This quick prose segment tells customers what your product is and what it does.
* Price. Here’s how much you’ll charge for the product in the country you’re targeting.
* Brand. You may want to include your parent company name, a subsidiary, or just a brand associated with the product here.
* Availability. Google Shopping provides customers with information on how many of a particular product you have in your inventory.
* Link. The link is the URL to the product displayed in Google Shopping results.
* Image link. The image link is what Google Shopping uses to display a visual representation of your product in Shopping Search results.
* Title. The title is a quick overview of your product. For instance, “Stylish Mountain Bike.”

You can do all this manually, but choosing the template provided by the Merchant Center is probably the easiest way to convey this information. The Google Sheet comes preloaded with columns for all of these parameters. All you have to do is fill them in, with each row representing a product.

Once you’ve done that, upload the Sheet to the Merchant Center and click “continue.” Google will then create the product feed (or set of feeds), and you’re all done.

If you want to view your feeds, choose Products > Feeds > Primary feeds from your Merchant Account.

What Can You Sell on Google Shopping?

You can sell a lot of goods via Google Shopping, just as you can on other popular platforms, like Amazon and eBay.

However, there are rules by which you must abide. If you do not, the search giant may suspend your account.

Google prohibits the sale of particular goods on its platform, including the following?:

* Counterfeit Goods. You are not allowed to sell products on Google Shopping that are indistinguishable from genuine brands. You cannot pass off goods not made by the owner of the intellectual property as the genuine article.
* Dangerous Products. Google doesn’t allow the promotion of what it calls “dangerous products.” Items in this category include psychoactive drugs, recreational drugs, weapons, ammunition, fireworks and explosives, and instructions for making dangerous items.
* Inappropriate Content. Inappropriate content or products include anything that Google considers might cause offense, discrimination, or violence.
* Unsupported Ads Content. Google doesn’t allow retailers to place ads on the platform that they then cannot back up with real products and offers. If you place an advertisement on the platform, it must be legitimate.

Google also restricts the sale of certain goods, according to bespoke policies.

* Adult Content. Google does allow the advertising of adult-orientated content but places restrictions on advertisers. You cannot, for instance, target minors, promote content that is overtly sexually explicit, or promote content with non-consensual themes.
* Alcoholic Beverages. Google allows the promotion of alcohol, but advertisers must, again, abide by a set of rules. You cannot target individuals under the legal drinking age or customers in countries where the authorities ban the sale of alcohol. You cannot portray excessive drinking in a favorable light. You cannot suggest that drinking alcohol brings medical or therapeutic benefits.
* Gambling-related Content. Google has rules that limit the degree to which you can promote gambling-related products on Shopping.

Other restrictions apply to healthcare products, political content, and copyrighted material.

How Does Google Shopping Make Money?

As we’ve already mentioned, the Google Shopping business model doesn’t directly generate revenue for Google, given the fact they are free listings.  It instead makes money by charging for advertisements and featuring promoted products, as it does on other services.

Bonus Tips for Google Shopping

Want to make your Google Shopping experience better? Check out these bonus tips.

1. Keep your pricing competitive. Google Shopping is a data aggregator, collecting pricing information from sellers across the web. It is, therefore, essential to keep prices low if you want to attract business.
2. Segment by user intent. Research indicates that different types of searchers perform better than others. Branded product searches, for instance, tend to garner higher returns than non-branded equivalents. For example, a user searching for “Samsung Smartphones” will probably part with more money than one looking for “smartphones.” By segmenting your campaigns, you can bid higher for the best-performing searches, while paying less for those less likely to yield stellar returns.
3. Segment your products by ID. Every product in your inventory should have a unique ID. Over time, you’ll find that different products offer varying profit margins. Margins on electronics and apparel, for instance, tend to be low, while home and garden are much higher. Segmenting your products by ID allows you to take margins into account when you are advertising on Google Shopping
4. Segment your campaigns by the hour of the day. The performance of Google Shopping Ads tends to vary throughout the week. Weekday mornings tend to be the most lucrative, while demand tends to drop off as you get into the late afternoon and evenings. You’ll want to set your Merchant Account so that the amount that you bid changes in hourly slots as user behavior ebbs and flows.
5. Use remarketing lists for search ads. Using this service across all Google touchpoints (such as shopping, search, images, and so on), will increase the likelihood of conversion. Remarketing reminds users of their interest in your products and encourages them to part with their cash.

So, there you have it: All you need to know and how to benefit from the recent changes to the Google Shopping experience and an overview of how Google Shopping works. What are you waiting for? Get out there and list your products for FREE.

Daniel Trick
Daniel Trick

Head of Content

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