Some good news for online traders, in that price comparisons on the Internet will now become more competitive again in the future. For a long time, this has been constrained by the online price comparison service Google Shopping. Last summer, following several complaints from competitors, the EU Commission also entered the fray. The search engine giant Google received a record fine for alleged distortion of competition, with the EU Commission imposing a penalty of 2.42 billion euros.
The allegation was that competition in price comparison markets was being restricted by the Google Shopping service. Furthermore, Google had been exploiting its monopoly status as a search engine by ranking its own Product Listing Ads (PLA) disproportionately advantageously. In plain language, this means that when a consumer is interested in a certain product and searches for it via the Google search engine, it is noticeable that ads from Google Shopping are much more prominent in the search results than other price comparison services. This offers Google a considerable advantage for its own price comparison service due to a much poorer ranking of its competitors.
But what has changed in the situation since the ruling by the EU Commission last year? Can retailers and manufacturers now finally breathe a sigh of relief in eCommerce?
Dominance of Google Shopping – Little competition in price comparison markets
Figures from an investigation by Searchmetrics show that competition on price comparison markets has indeed been restricted by Google Shopping. Over the past five years, Searchmetrics has been scrutinising Google Shopping ads in search results from the UK, Germany and France. The key result is that the visibility of Google Shopping elements has increased by more than 300 percent over this period. At the same time, the average visibility of Google Shopping competitors, including idealo.de, billiger.de and guenstiger.de, fell by almost 60 percent on desktop computers and almost 30 percent on mobile devices.
It also became clear that only 11 percent of competitors in Germany achieved a first-page ranking on the search results list (France around 7 percent, Great Britain almost 15 percent).
Furthermore, Searchmetrics also revealed that, in Germany, 98 percent of all results in the product comparison search came from Google itself, and only 2 percent from its competitors.
Google is not sitting idle, but now making adjustments
A fine of 2.42 billion euros will make even the biggest of players think again. And even if the group has already reacted to the verdict of the huge fine by quickly uncoupling Google Shopping from its normal search function, some competitors suggest that their own price comparison services would still have no chance of being found through the search engine despite those adjustments. The Silicon Valley giant, however, has countered cleverly. Competitors can now compete with Google for advertising space, where, via online promotions, online shops can place their own items in the product search, above the organic search results. For this pleasure, however, those advertisers will only have to offer a higher sum than Google does itself.
Google Shopping – A brief review
Some 14 years ago, nobody would have expected this price comparison service to trigger such a heated debate. Google Shopping did not originally get off to such a good start. With Froogle, the Google concern entered the separate market of price comparison services in Europe for the first time in 2004. This service was then renamed Google Product Search in 2008 and eventually Google Shopping in 2013. The service enabled consumers to compare items and their prices directly, providing them with an easy overview of the various offerings from online eCommerce.
What should online retailers be watching?
The above figures make it clear that online retailers cannot yet breathe a sigh of relief. Even if Google Shopping were to show more transparency in bidding for advertising space in the future, an about turn by the group remains barely conceivable – since the ads placed there primarily ensure high traffic. In contrast to this, however, competing price comparison portals do provide higher quality clicks.
What should online retailers take into account when selling – on marketplaces, price comparison portals and even their own online shop –and how do they sell their products successfully?
Price comparison services are an important platform for online retailers. Particularly for omnichannel retailers, this represents an ideal approach to offering their products and services to a broad range of customers. For this reason, online retailers should never lose sight of the performance of their products. On the one hand, the visual design of the product offerings is of enormous importance for increasing click rates. And on the other hand, price is a decisive factor in a consumer’s decision to even click on an ad at all. Should a consumer uncover a more favourable price amidst the competition, the probability is high that they will also eventually buy there. Accordingly, products and prices are the essential elements of sales success in eCommerce. Online retailers should therefore know both the product range and the prices of their competitors, to be able to make their own adjustments and thus maintain their competitiveness. Sifting through huge amounts of data in eCommerce every day to search for and compare individual items and prices is now virtually impossible manually. Automated analysis tools like blackbee offer a remedy and also support online retailers in keeping an eye on individual articles and prices across all platforms.
Clear advantages for online retailers: With blackbee you always know of market movements
A cross-platform overview of the market is essential to success in eCommerce. With efficient market analysis from blackbee, you can keep an eye on the competition based on up-to-date, highly valid and very precise data. Regardless of competitor offerings on marketplaces, price comparison portals, online shops or Google Shopping, retailers and manufacturers are optimally informed daily on how prices, product features and even entire product lines are changing among their competitors in eCommerce.
Our market analysis allows you to correctly assess your market position and thus always remain one step ahead of your competitors.
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