Online shoppers still making Google their launch pad - Morgan Stanley
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It's Black Friday, and a largely turkey-addled nation's eyes often turn to holiday shopping on the year's biggest day for commerce (with tech-focused deals on Cyber Monday just a few days away as well).
But when it comes to shopping online, where are people starting their hunt for deals? It's still largely Google Search (NASDAQ:GOOG) (NASDAQ:GOOGL), Morgan Stanley says - and even members of Amazon Prime (AMZN) largely report starting product searches on Google.
Google's position atop the e-commerce funnel is still robust, the firm's Brian Nowak and team said.
"We see GOOGL's retail search innovation the past few years bringing more merchants and inventory across improved GOOGL e-commerce experiences (Search, Maps, YouTube etc.) and our AlphaWise survey data continue to show how e-commerce consumer behavior (including Prime member behavior) remains strong on GOOGL," the firm said.
Also important, as the consumer weakens (if the consumer weakens), "with e-commerce/CPG making up ~42% of total online advertising, we see this position as being key to driving durable paid search growth."
Among its key takeaways, the firm says "More Americans visit Google (including YouTube) first when researching products online than Amazon (AMZN) and Walmart (WMT) combined (58% vs. 27%)."
Some 35% of Americans visit Google first when they are trying to compare prices for already researched products, Nowak and team added - another key driver for a holiday season when consumers may be more price sensitive after 2022's inflation.
And "Even when consumers know exactly what products they want to purchase, 18% still visit Google first (while 50% go directly to Amazon)," the firm said.
About 57% of Amazon Prime (AMZN) members start on Google to research products, up from about 50% in 2020, and 32% of Prime members hit Google first when comparing prices, Morgan Stanley said.
Turning to online travel shopping, the firm said about 80% of U.S. survey respondents said they began travel research online - and 37% start on Google, vs. about 20% on Expedia (EXPE) and 15% on Booking Holdings properties (BKNG).
Price comparisons narrow that gap somewhat - 29% on Google, 22% on Expedia and 20% on Booking sites - and further down funnel (when consumers know their exact trip), the three even out around 20% each.
Check out Citi's report on consumer brand intentions when it comes to holiday-season tech gadget shopping.