Comscore: Google Checkout - significant growth this Q4...

Bob Peck at Bear Stearns hosted a call with Gian Fulgoni, Chairman of Comscore.  There was lots of great macro ecommerce info, but I thought what would be interesting to eBay Strategies readers is some of the content around Google Checkout.  The take-aways for me were:

1. Google Checkout is driving the AOV thanks to the promotions they are running.  Comscore has it at $64 before and $71 after. (10% increase).
2. The promotions also increased the transactions/buyer from 1.49 to 1.67 (12% increase).
3. The following chart shows the sales, buyer volume and transactions for Google Checkout from 10/1/06-12/10/06.

So sales via Google Checkout are up 1200% in Q4.  WOW.  They admittedly started with a small base, but it's very interesting to see the growth presented this way. One has to wonder how long eBay's argument for not allowing Google Checkout will hold water that it is an "unproven system".  Maybe when they overtake the Paypal transaction volume?

Comments

[Benelli]

Anyone integrating with Google Checkout will notice that the item price (for products) is named 'startPrice'... this is intentional as Google can turn on Bidding at any moment. They are simply waiting for Checkout to hit ciritcal mass so that Google can offer FREE Auctions by next fall.

Checkout will hit critical mass when the majority of online retailers support (or start forcing users to use) Google Checkout. With FREE payment processing, believe me, as a retailer, I and my peers are ALL OVER THIS. So online retailers are already flocking to Checkout. Buyers will follow the discounts and rebates and Checkout Buyers will hit critical mass by next fall.

If eBay has not allowed Google Checkout by next fall. You will see what VOTING WITH YOUR FEET means as sellers and buyers alike flock to Free Google Auctions with Free Google Checkout Payment Processing.

PS: I did an experiment and sent 25,000 of my items from my eBay store to Google Base with Checkout enabled. The next day 20% of my sales came from Base + Checkout.

Does anyone have a better idea of where this is leading?

How can eBay out maneuver Google at this point?

[Sushant Ajmani]

I don't think it's gonna cost EBAY a big loss because; during the past few yrs. PAYPAL has built a great customer base and the whole business is lying on LOYALTY and CONVENIENCE. In order to snatch the PAYPAL customers, GOOGLE has to pay a decent switching cost; and the current strategy that they are following by giving a DOLLAR OFF on various sites is gonna help them in building a Market Share in the short run but at the end; COST will come in to picture and at that time, they have to change their game plan.

I don't think EBAY would be a looser in the LONG RUN but; you never know the customer. I believe going together would give a Psychological advantage to the EBAY and would add to their BRAND VALUE.

But, they should wait for next few months!!!

[Chris]

"it looks like eBay may be forced to make a deal with Google if Checkout's growth continues to accelerate. I see eBay grudgingly allowing Google Checkout if PayPal is include in Checkout as a payment option and only after Google's free transaction deal has expired."

I really can't see eBay allowing Checkout in the near future - it's not an e-money payment system but is more akin to an e-wallet
http://www.tamebay.com/2006/12/1200-of-almost-nothing-is-still-almost.html

[Sushant Ajmani]

No doubt, since last few weeks there has been a dramatic increase in the Transaction Rate overall in the Retailing industry due to Google Checkout but, what kind of transactions we are talking about?

According to me, Google Checkout is still immature and require following changes for the consistent results in the coming year 2007.

1. Multi-Ship To Capability.
2. Explicit Promotion Capability.
3. Line Level Shipping Methods.
4. Quantity Updation.

Above changes would bring great online results plus, would increase the AOV and Conversion rate to a great extent.

[Randy Smythe]

Scot, it looks like eBay may be forced to make a deal with Google if Checkout's growth continues to accelerate. I see eBay grudgingly allowing Google Checkout if PayPal is include in Checkout as a payment option and only after Google's free transaction deal has expired.