Lower prices translate to more in-store foot traffic, but how can you make that behavior work for you on Google Shopping? By drawing on the in-depth research that we presented at SMX Seattle we can unlock the connection between price points and Shopping success.
Over the past few weeks we have been talking about the findings of our Advanced Google Shopping study, which uncovered some fantastic insights into consumer buying behaviour and how product pricing strategy plays an important part in campaign performance. Here’s a brief recap.
66% of consumers don’t buy the product that they initially clicked on
We analyzed a dataset of more than 15,000 Google Shopping conversions across the German, UK and US markets, covering several international retailers from the fashion, sports, outdoor and luxury sectors. We looked at search queries, clicked product ads and products purchased. We found that, of Google Shopping conversions:
- Only 34% were for the product that was initially clicked
- 30% bought a product by the same designer, but from a different product category
- 36% bought a product from a completely different designer
Read the full article by Andi Reiffen (Crealytics CEO), “Can you manage your inventory with Google Shopping?”.
Understanding the link between what was clicked and what was bought is crucial in driving bidding strategies moving forward. But how much control do advertisers really have over this?
Higher priced products see a 70% drop in impressions
We also investigated the impact that changes in product price has on Google Shopping performance. We tested a set of products at a “low price” and then at a price increase of 43%, with bidding staying the same. The results:
- Impression volume on the higher priced products decreased by 70%
- Click volume on the higher priced products decreased by 79%
Generally, it would be fair to expect that lower-priced products generate higher CTRs, but the difference in impression and click volume suggests that Google is actually favouring those campaigns with products at low price points.
Read the full article, “Is price a proxy for Quality Score in product ads?” on Search Engine Land HERE.
What does this mean for advertisers?
This is what we know.
- Consumers, more often than not, browse your site and buy a different product from the one that drove them to your sites.
- Low-priced products receive a much higher impression share than those above market averages.
While there’s a historical fear that lower prices only deliver bargain shoppers and small shopping carts, our data shows that lower priced goods can be an excellent catalyst for additional business. The fact is, often the queried and clicked product is the cause of engagement, but exposure to additional choices and a well-executed customer experience can translate to outstanding value.
Given two thirds of users get distracted into purchasing other products on retailer’s websites, advertisers can selectively use lower-priced products as entry points to gain traffic, in order to upsell /cross-sell other high-margin products.
In a continuously competitive auction, these gateway products or loss leaders can be the key to driving increased traffic via Google Shopping.
So what next?
Pricing strategy is a fertile ground to test the relationship between Google Shopping and impression volume. Retailers looking to increase market share and revenue via Google Shopping should identify which of their products could act as catalysts for increased buying behavior, bigger shopping carts and higher profitability.
Work with your product team to identify which of your items you could test as catalyst products.
If you are a Crealytics client, then please feel free to contact your Account Manager to talk about this.