Google bids to carefully turn YouTube right into a shopping destination

Every toy, device and good you see on YouTube could soon be on the market online - not on Amazon, but right on YouTube itself.

The world’s major video site recently started asking creators to use YouTube software to tag and track products featured in their clips. The data will then be associated with analytics and shopping tools from parent Google.

The target is to convert YouTube’s bounty of videos into a vast catalogue of items which viewers can peruse, select and purchase directly, according to sources. The business is also testing a new integration with Shopify for selling items through YouTube.

A YouTube spokesperson confirmed the company is testing these features with a restricted number of video channels. Creators could have control over the merchandise that are displayed, the spokesperson said. The business described this as an experiment.

The moves have the potential to transform YouTube from an advertising giant right into a new contender for e-commerce leaders such as for example Amazon.com and Alibaba Group Holding.

“YouTube is one of the least utilised assets,” said Andy Ellwood, president of e-commerce startup Basket. “If they decided they would like to spend money on it, it’s an enormous opportunity for them.”

It’s unclear how YouTube will create revenue from these sales. However, the service has begun offering subscriptions for creators and takes a cut of 30 % from those payments.

Alphabet’s Google has taken multiple stabs at online commerce, with limited success. The company has mostly preferred to sell ads that send people to other digital stores, instead of selling products itself.

However, the pandemic has hammered marketing budgets, particularly in the travel and physical retail sectors that are major Google advertisers. Meanwhile, e-commerce has boomed as people stay home and order more products online. That’s left Google watching from the sidelines as rivals such as Facebook and its own Instagram iphone app become hotbeds of online shopping. Amazon, the united states e-commerce Goliath, has seen sales soar, while Google suffered its first ever earnings decline in the next quarter.

A recently available RBC Capital survey of marketers revealed “social commerce” as a hot area that is “especially bullish” for Facebook and Pinterest, an electronic search and scrapbooking company. After Facebook boss Mark Zuckerberg unveiled an updated Shops feature for retailers in-may, the company’s stock jumped. Google doesn’t want to miss out.

For months now, Google executives have signalled that YouTube will be central with their e-commerce strategy. On a recent earnings call, leader Sundar Pichai suggested YouTube’s sea of popular product “unboxing” videos could possibly be turned into a shopping opportunity. The video site is full of other popular categories, such as make-up and cooking tutorials, where creators tout commercial products on air.

The company in addition has revamped its e-commerce and payments division. In July, it announced a plan to lure merchants to Google Shopping, its online storefront, including an integration with Shopify to ensure that sellers could manage their inventory.

Late this past year, YouTube began testing a similar Shopify integration for creators who can list as much as 12 items on the market on an electronic carousel below their videos, according to the company. Merchandising is one of the strategies YouTube is pursuing to diversify earnings for creators beyond ads. At a minimum, the new measures could help YouTube deepen the data it collects from videos to strengthen its ads business.

Amazon and Walmart have tinkered with shoppable videos for several years. So far, neither retailer has proven much progress. In China, though, this business design has removed. On Douyin, the Chinese version of TikTok, influencers use live streamed videos to hawk wares from lipstick to smartphones in real-time to hundreds of millions of users.