Last week, Google had two announcements that are pointing to new directions in ecommerce. First, Google introduced improvements to their product search. Improving product search sounds fairly lame by itself until you look at what “improvements” are included:

• Local availability on Google Product Search: They have partnered with more than 70 retail brands and software manufacturers that offer ecommerce order/inventory management to show you local stores that have items in stock.
• Google Shopper 1.3: The shopping app helps shoppers do some comparison shopping while mobile. Including search filters like price and brand make this a very useful application.
• “Popular products” and “aisles”: Ecommerce sites have been borrowing ideas from physical stores for years. Now, Google is including “popular products” (a really basic idea that should have been implemented ages ago) and “aisles”. Aisles sound interesting, but in reality it is just faceted search, which is not surprising in Google’s case.

Local availability is a huge improvement, and local search filters for price and brand are a must-have when comparison shopping. However, the popular products and aisles concepts move Google’s product search into the realm of true ecommerce. As an example, look at the screenshot I have included. Does this really look like a search engine or does it look like a lot of ecommerce sites that exist already? There are many ecommerce sites that do not even have this level of search filtering. By presenting this type of user interface on top of the aggregation of  possibly hundreds of stores, Google has positioned itself as the new user interface for retail ecommerce. The image shows a simple search for TV, and LCD was selected as the display type. As you can see, there are several interesting products available in just the first 4 listings. Now, imagine that Google can get Google Checkout to be used on all of these sites. Also imagine that Google starts displaying “sponsored product” listings instead of generic AdSense advertisements. This could give rise to a new segment of the ecommerce industry, product search optimization (PSO), that would work very similarly to the existing search engine optimization (SEO). SEO was big because it could drive traffic to your site and maybe you make some good money from advertisements. Think of how important PSO would become if it could seriously improve sales of products. Retailers would pay a lot of money for sponsored product spots and for services related to PSO.

Of course, the improvements to product search were not enough. In fashion, there are constant trend changes, or people will just like the style of some celebrity. So, Google takes an interesting route by creating Boutiques.com. The basic idea is that they have celebrities, bloggers and designers curate their personal tastes. Then you can follow that person, or even create your own “boutique” by selecting items that you like. After the human curation is complete, the algorithmic curation begins. Based on the styles selected, you will then get personalized recommendations for other items you would like. This is only available for women’s fashion at this time, but you can assume that this concept will expand quickly.

Now, what if you combine the product search improvements with the new personalized recommendations? Well, you could be shopping in your favorite store and you cannot find the dress you wanted. You just open up product search to find other stores that are nearby that have the item in stock. If there is nothing local carrying the item, then your boutique recommendations will tell you about a similar product that you can also search for locally. For some people, this could be shopping nirvana. You could find the best price in a completely different store for an item that is similar or better than the item you were originally shopping for. Retailers would kill for this ability, and likely will be spending a lot of money to get that other item in their store so that you can spend your money in the same store.

Physical stores have been analyzing their retail data for years. That is why some items are closer to others. Cross-selling and similar items are huge revenue generators for physical stores. Comparison shopping deals like beating the best advertised price by 10% are popular because they bring more people into the stores. That is important because people rarely buy just one item at a store. If you win the comparison shopping battle, you may lose a little money on one item, but you get the extra revenue for other items and potentially gain a loyal customer. Google just added all of this last week in an industry that is measured in the tens of billions of dollars. The future of ecommerce is now mobile, dynamic and personalized.