Wednesday, September 19, 2007

Local Search Is About Products Too, Not Just Restaurants And Plumbers

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Excerpts from: Greg Sterling's
Local Search Is About Products Too, Not Just Restaurants And Plumbers

Locals Only - A Column From Search Engine LandOften when people discuss local search they're referring to finding restaurants or plumbers. But the concept of "local search" should include goods and product purchases as well.

Whenever I discuss products and retail as part of the definition of local search people are often a little skeptical. Yet again and again studies show that consumers are using the Internet to do research before buying locally in stores. This is especially true for "considered purchases" (bigger ticket items), but it's generally true for products across the board.

The Internet has not emerged predominantly as a transactions platform, as many had predicted several years ago, but instead as a marketing platform driving offline transactions.

Jupiter and Forrester Research-- have more recently come around and said that the growth of online commerce is "flattening," while the Internet's influence on offline consumer purchases continues to grow almost unabated.

Here's what Jupiter's most recent e-commerce forecast had to say: Despite the slowing of growth in online buying, web influenced off-line sales will grow at a slightly faster pace over the next five years, reinforcing the vast advertising and marketing value retailer websites present.

To look out into the future a couple of years, the three most interesting trends in "online shopping" are local, social and mobile:

  • Local: as in "Where can I buy it today?"
  • Social: as in "Can anybody recommend a . . ."
  • Mobile: as in "How much does it cost somewhere else?" or "These guys don't have it, where can I go to find it right now?"

Many other studies, including a recent one from Yahoo and comScore, have similarly documented the Internet's (and search's) impact on offline transactions. While conventional comparison engines leave "money on the table" by failing to capture or extract value from this dominant consumer behavior pattern, Internet-influenced local shopping has its challenges as well.

The "inventory infrastructure" is developing but has yet to be fully built out. Sites like ShopLocal, Krillion and NearbyNow, among others, are working diligently on this challenge. Once substantially accomplished, that inventory information will transfer into mobile with relative ease.

Another challenge is tracking: showing the online-offline connection. Right now offline conversion tracking is limited to after-the-fact consumer surveys, coupon redemption and phone tracking, as a kind of proxy for purchase intent. Phone tracking arguably doesn't work well for products because people many not call stores in the way they call service businesses (e.g., doctors, plumbers) for appointments.

My Take

The online shopping/overnight delivery model has revolutionized the retail industry for some products and services. But the big dollar items in our household budget can't be ordered on a Web site or delivered in a brown truck.

How do I make those big buying decisions? How do I find just the right local business? Probably the same way you do. And it is a process that's remained unchanged since the first word of mouth referral occured with the words, "You gotta call _____________."

Now, how will this process be facilitated by the Web?

Tags: localsearch

Wednesday September 19, 2007 - pm (EDT)