The Future of Online Shopping Is Offline

This is something of a mantra for me: online shopping is ultimately about offline/local transactions. Those in the retail segment prefer to call this “multi-channel marketing.” Regardless, the future is about telling people where they can buy things in the local market. E-commerce has a recurring bit part in my movie about shopping’s future but it remains small despite some good reviews.

comScore glessfully reported ecommerce revenues of $102 billion (not counting travel) for 2006. According to the company that represented 26% growth over 2005.

EC 06

Don’t get me wrong (as they say), $100 billion is a very impressive large number. But, to put it in perspective, ecommerce is no more than about 3% (or so — Forrester argues more) of US retail. And get this, Jupiter says in its forecast that ecommerce is “maturing” and will slow.

Now let’s look at data from Compete representing the “top ten online retailer search terms and traffic ranking”:

Search terms

These are direct navigation queries for “online retailers.” Or are they? While all these companies sell online, eBay and Amazon are the only two true “online retailers.” All these other names are well-known retail brands where the overwhelming majority of purchases happen in local stores.

And what’s the most popular area of most brand retailer websites? You guessed it: the store locator.

There are a growing number of sites seeking to provide local inventory information (or its equivalent):

  • ShopLocal
  • Yokel
  • NearbyNow
  • StepUp
  • CNet (via Channel Intelligence)
  • Become.com (in a limited way)
  • Google (via Froogle and partnerships)
  • Yahoo! (soon?)
  • Others (yet to launch)

More and more offline purchasing is influenced by online research and advertising. This is the dominant paradigm. True, consumer purchase behavior is become more complex but it’s clear to me where things are going . . .

The only question is how do publishers and site operators respond?

SH

Source: MORI Research for the NAA (2006) n=4,020 US adults

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13 Responses to “The Future of Online Shopping Is Offline”

  1. SlifterGuy Says:

    You should also take a look at Slifter – it carries more local inventory than most of those on the list above and its the only one specifically designed to work on mobile phones.

  2. eMarketer Comes to Defense of eCommerce « Screenwerk Says:

    [...] behavior is becoming more complex but local shopping will dominate, with greater and greater Internet influence, well into the foreseeable [...]

  3. Local Shopping: Why Are People Surprised? « Screenwerk Says:

    [...] I’ll say it again folks, the future of online shopping is offline. I’m now working with a startup that has found a way to capture the connection between online [...]

  4. Why Are E-Commerce Conversion Rates So Low? « Screenwerk Says:

    [...] Related: My earlier post, “the future of online shopping is offline.” [...]

  5. Google Search Personalization and Local « Screenwerk Says:

    [...] quite significant for Google. There’s empirical evidence that shows, and I’ve argued previously, that lots of local search is obscure to the engines because of a lack of geographic modifiers or [...]

  6. Jorgen Bodmar Says:

    How about merchandise that are not available in local stores, or off line retailers that only have a small chain of stores? In my opinion it will be a rise in the x-border consumer transactions that opens up for niched players working with global perpectives.

  7. comScore’s ‘IYP’ Rankings: Whazzup? « Screenwerk Says:

    [...] I said in my original post discussing this: These are direct navigation queries for “online retailers.” Or are they? While [...]

  8. E-Commerce Slowing, Internet Influece Growing « Screenwerk Says:

    [...] The Future of Online Shopping Is Offline [...]

  9. Trendy Shopping Says:

    I don’t think so!

  10. User Reviews and Local Search: Great Together » Small Business SEM Says:

    [...] know that online shopping is primarily a search online, buy offline model. That’s why local search is so important. Now, if the study is taken at face value, we [...]

  11. Search Online, Buy Offline Has a Long Way To Go » Small Business SEM Says:

    [...] Local search industry watchers have been saying for a while now that local search is primarily a search online, buy offline model. We look online for the right product, and then go buy it at a local store. I believe that to [...]

  12. Top Posts of 2008 « Screenwerk Says:

    [...] The Future of Online Shopping Is Offline         [...]

  13. Online E-Commerce a Minor Threat | Clarinova Retail -- Connecting Buyers to Your Brand Says:

    [...] Not likely. Internet sales are still a small part of total US sales: E-commerce is less than 4% of US retail sales. Some market segments have much smaller percentages: 1% in Apparel, and 2% in sporting goods. E-commerce is important, but, despite years of hype, online purchasing is not how people buy products. As analyst Greg Sterling says, The dominant paradigm has emerged: online “shopping,” offline buying. [...]

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