Google Checkout offers promotions to drive usage

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Google unveiled a series of aggressive money-saving promotions over the past few months intended to hasten the adoption of its new Google Checkout feature among online retailers and consumers.

For example, during the holiday season, a few select retailers were offered $20 off every $50 purchase made with Google Checkout.

"The [sales] volume was unprecedented," said Ritz Interactive founder and president/CEO Fred Lerner.

Ritz is a network of e-commerce sites that includes http://www.ritzcamera.com/, http://www.cameraworld.com/ and http://www.boatersworld.com/. The company's sales expectations for the fourth quarter were exceeded by 50 percent, largely as a result of the Google Checkout promotion, Mr. Lerner said.

Checkout, Google's transaction processing feature, was introduced in June with the goal of driving e-commerce sales across industries by addressing two of the reasons why online sales aren't growing at a faster pace: shopping cart abandonment and consumers' fear of sharing personal information online.

"E-commerce is still growing and we're trying to accelerate that," said Gavin Chan, product marketing manager at Google Checkout.

Since Google Checkout is available to any e-commerce site, Google is positioning it as a service that consumers have to register for only once. This is supposed to make it more convenient and faster than a site's typical checkout process and, as a result, could cut down on shopping cart abandonment.

In addition, the fact that, with Google Checkout, a consumer's information is stored with only one company may alleviate the concern that some people feel about sharing their personal information online, Mr. Chan said.

So far, the company has signed up "thousands of merchants" for Google Checkout, including Linens & Things, Starbucks, Zales and Toys R Us.

New customers as well as returning ones both seemed to respond well to the $20 off any $50 purchase promotion on the Ritz network, Mr. Lerner said. Ritz advertised heavily with Google, other search engines and throughout the Internet during the holiday season to drive people to its sites.

"[When customers] saw that they could get $20 off, it increased our conversion rates substantially," he said.

Since implementing Google Checkout, site traffic on Ritz Interactive sites has increased more than 40 percent and conversions are up 35 percent. The company will do slightly less than $100 million in sales for 2006 compared to $83 million in 2005.

Other retailers have also experienced strong results with Google Checkout, Mr. Chan said. Sierra Trading, for example, reports that 20 percent of its site visitors choose Google Checkout and, of those, 60 percent are new to Sierra Trading. Sportscloseouts.com saw conversions increase by 40 percent since introducing Google Checkout. In addition, the site incorporated the Google Checkout badge into its AdWords buys and saw a 1.5 percent increase in click-thru rates afterwards.

Once the $20 off a $50 purchase promotion ended, Google introduced a new one offering $10 off to consumers signing up for Checkout for the first time and making a purchase of at least $10. To further entice consumers, Ritz has put together an entire page of $10 items on its Ritz Camera Web site that first-time users of Google Checkout can purchase for only the price shipping.

Ritz Interactive has also accrued savings in transactional processing, because Google Checkout offers participating businesses $10 in free transactions for every dollar that they spend on Google AdWords. This was originally introduced as a promotion for the month of November, but has been extended by Google through the end of 2007.

Later this year, Google plans to introduce Checkout internationally.

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