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Should Retailers Copy Google Shopping Express' Expansion with Costco?

Google today announced it has included Costco as part of its Google Shopping Express in the San Francisco Bay area. This partnership allows members of the warehouse club to receive their purchases on the same day after ordering online, including from Android or iPhone devices. Additionally, the prices are the same online as in-store and customers will still be able to obtain six months of free same-day delivery and $5 off their first order. 
While same-day delivery can enhance a retailer’s appeal, it may not be for everyone. 
According to Internet Retailer, only 6.4% of customers abandoned a shopping cart because same-day delivery wasn’t offered. While retailers may want to convert that 6.4% into buyers, they have to consider the benefit-cost-analysis of the service. Retailers have to calculate the cost of offering the same-day delivery service (shipping costs) and the potential revenue garnered. If the cost outweighs the benefit, such service obviously shouldn’t be offered. Even if the benefit surpasses the cost, but only marginally, retailers may be better off investing their time and resources elsewhere.
Here are three approaches retailers can take to increase their online conversion rates:
  1. Do A/B testing

    Consumers respond to certain call-to-action or web content differently. Some may react more strongly to a call-to-action on the top right-hand side of the screen while others may develop stronger reactions to a call-to-action at the bottom of the website. Hence, it’s imperative for you to conduct A/B testing to ensure your call-to-action or web content appeals the vast majority of your consumer group. To effectively conduct an A/B test, you have to try a variety of content for a relatively long period of time. For instance, you can test 5 different images for 2 weeks each. This allows you to attain a more comprehensive result of each image’s impact in terms of the click-through rate and revenue.

  2. Shorten the checkout process

    Having a long e-commerce checkout process is equivalent as waiting for a long time at a brick-and-mortar and it drives people crazy! And with digital mobility of online stores today, consumers can now leave your e-tail store easily and do their shopping elsewhere. To deter this undesirable event from happening, you have to shorten your checkout process. Chapters for instance, only has 2 steps in their checkout process. Amazon, an e-tail giant, only requires their customers to complete 2 pages of information in order to finish their order. After all, as a KISSmetrics article said it best regarding the relationship with e-tailers and online consumers, “ask for less and they’ll buy more.”

  3. Use remarketing advertisements

    Brands now have a myriad of remarketing tools to choose from to target customers who have abandoned their shopping carts. Companies can use Google AdWords to showcase remarketing display ads on content websites such as blogs and newspapers to remind consumers to complete their purchases. They can also use Facebook’s Custom Audience feature to showcase retargeting advertisements prominently on users’ newsfeeds. With these ads, businesses can highlight their product benefits to remind consumers why they wanted to purchase the items in the first place.

While same-day delivery can entice many consumers, it may not be feasible for many merchants. For these retailers, a potential strategy is to deliver services that are more possible and valuable to shoppers, such as a spectacular shopping experience. By engaging in split testing, increasing the checkout efficiency, and utilizing remarketing ads, retailers can ensure their consumers are viewing the best quality content, receiving seamless shopping experience, and understanding why their initial purchase intent was a brilliant choice. This subsequently will increase retailers’ chances of converting more shoppers into buyers.