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Holiday Shoppers May Soon Turn to YouTube

YouTube Takes on the Mall

It’s Prime Day on Amazon (AMZN), the unofficial kickoff to the holiday shopping season. With the ongoing pandemic causing many people to continue shopping from home, retailers are on the lookout for creative ways to highlight their products. A new tool in marketers’ pockets may soon be YouTube (GOOGL).

The vision: imagine YouTube as a directory of items for sale—the boots on one creator’s feet, the mirror in that living room, the tools in a DIY video. Viewers could soon have the option to click on a video and buy products directly from YouTube.

Google Getting in on E-Commerce

YouTube is already an advertising powerhouse for Google, but the pandemic has impacted that power to some extent. With coronavirus-related cuts to ad spending, Google hit an unpleasant milestone in the second quarter when revenue fell for the first time in the company’s history. Now, Google is hoping to get into the e-commerce game.

Bloomberg Intelligence expects the e-commerce market to grow to $2.8 trillion by 2025 as platforms like Instagram and Facebook (FB) allow users to shop while they scroll. “The sheer size of the e-commerce market and its future growth makes it too big to stay out of,” one Bloomberg analyst said.

When Facebook launched Shops a few months into the pandemic back in May, its stock hit an all time high, surging by 6.4%. After the announcement, investment management firm AllianceBernstein (AB) told clients that Facebook just opened up a $1.3 trillion market. That’s the kind of revenue stream that could await Google if this experiment succeeds.

The Future is Shoppable

Last year, YouTube released a Shopify integration below videos. Creators could tag as many as 12 items for sale, and the items would rotate below their videos. Google also introduced a Shopify integration on Google Shopping in July to help retailers manage their own inventory.

During a recent call with investors, Google CEO Sundar Pichai suggested the future of e-commerce on YouTube could have something to do with the videos themselves. He hinted that the “unboxing” videos that are so popular on YouTube should allow viewers to buy the products they see on screen.

YouTube is full of cooking content, product reviews, and makeup tutorials. The tech-giant is betting the latest push can help keep more of the online shopping activity in its own ecosystem.

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