Using Loss Leaders in Google Shopping

Google Shopping provides very high quality traffic for retail websites, as it is pre-qualified and very targeted.  It’s very simple to set up, and once you’re approved, then you start getting traffic pretty much straight away.  The fact that the results are included into the main natural search results for many product and generic search terms means that getting Google Shopping set up for a retail website can be a quick win as part of an SEO campaign.

A well structured product feed written specifically for Google Shopping can make a big difference to how well your product set ranks in the results when they are organised by relevance, which is the default result set shown by Google:

Google Shopping Results

Winning.

But, the challenge arises when your products are not the cheapest in the market.  Internet shoppers are a fickle bunch.  There isn’t the same inconvenience of shopping around that you would get in the city centre where it might take trips to 10 shops to find the lowest price.  Online, you just need to change the order of websites in the search results, and you get the lowest price:

order Google Product Search By Price

If a user orders the results by price, and you’re not the cheapest, then you lose out on the sale.  It’s a tough world, but there you go.  In an age of price sensitivity, if you’re charging more than another person, then you miss out.

Which of the following results would you click on?

Canon Cameras Shopping results

Some businesses do behave in a fairly underhand way on product search – the T&Cs for the service state quite clearly that prices should include any shipping or handling fees, and that they should also be inclusive of VAT.  A few retailers ignore this, and benefit from it.  That’s bad for customers.

Loss Leading Products

Retailers have long used loss leaders to draw in customers.  Do you really think that Sainsbury’s make any money when they sell 24 cans of lager for £10?  the point is that once they have you within their store, you are exposed to more offers and as a result you buy more.  The shop uses the discount on the loss making product as part of their marketing budget for the higher value, higher margin items that they place alongside it.

This doesn’t seem to be the case so often with the way loss leaders are placed within a shopping feed.  Frequently you see products appearing at the top of the results when ordered by price that are not what the user is looking for such as this one for “Canon Cameras”:

Not actually a camera

While the product information here is for a specific camera, the price relates to a guidebook that retails for around £4.  It’s misleading to the user, and the retailer in question should really be a little bit ashamed.  The problem is they won’t be, they’ll have the user on their website, and will be able to sell them the actual product that they were looking for.

What would make more sense is to look at your stock from a marketing perspective, identify the products that you can afford to sell at a loss – end of line stock, obsolete lines, or just low end variations, and then optimise the content associated with that item for the generic or category term that is associated with it.  If for example you have a back log of last year’s low end compact camera and you want to shift the stock, optimise the listing for the product feed for the term that has the highest traffic – usually something like “brand + product”.  You provide a better user experience than the guy who is pulling bait and switch, and you still get the user onto your website where  you have the opportunity to up sell them to something more expensive, or encourage them to buy accessories and take a bigger margin on the sale.

By coupling loss leaders with a list of alternative related products that other customers have purchased in the past on each page, you encourage users to go deeper into your site, and increase your sales opportunities.