Google Cloud Prepares For Blockbuster Holiday Sales Season

Google (NASDAQ:GOOGL) is already preparing for the holiday shopping season.

Google says its Cloud unit is poised for a surge in fourth-quarter sales this year as U.S. retailers brace for record online shopping during the Christmas holidays because of COVID-19 lockdowns.

Google Cloud technology, used to host websites and store data, is a key part of many retailers’ e-commerce operations. As fees are often pegged to site traffic, a jump in activity will drive up revenue for the unit.

Stores such as Kohls (NYSE:KSS) and Wayfair (NYSE:W) lean on Google months in advance to ensure that they have enough servers to withstand increased shopping during holiday discount days such as “Black Friday” and “Cyber Monday” in November and December.

Holiday shopping is expected to boost demand further, as retailers including Target (NYSE:TGT) and Walmart (NYSE:WMT) have said they will reduce in-store hours because of coronavirus concerns. Electronics retailer Best Buy (NYSE:BBY) has announced a multi-year deal to centralize customer and product data with Google Cloud to improve its loyalty program and online ad campaigns.

Google says its Cloud unit has generated about 30% of its revenue during the fourth quarter in the last two years.