Shouldn’t Most ‘Product Search’ Count as Local?

On Wednesday morning I’m moderating a panel at the Web 2.0 event in San Francisco: “Local is the New Global.” It features the CEOs of Zvents, TheFind, NearbyNow and Krillion. Interestingly three out of four of these companies are product-related and have nothing to do with services — the area everyone tends to focus on in discussing “local search.”

Along those lines, there are many studies in the market that show the majority of consumers are doing online product research but mostly buying products offline. One of the earliest of these studies to document the online-offline phenomenon for products was from comScore and Yahoo! in 2004. They found that 92% of Internet/search influenced consumer electronics purchases happen offline in local stores. Here’s the slide from 2004 (the data were collected in Q1 ’04):

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But let’s not focus on or debate the precise accuracy of this 92% figure.

There have been plenty of other such studies since 2004 from BIG Research, Yahoo!, Nielsen and others with varying percentages who research online but ultimately buy offline. This “ROBO” number ranges from 70% to the low 90% range depending on the study and product category being examined. The point is that the large majority of Internet users conducting product research then buy offline in local stores.

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Source: Compete Inc., 2008 (n=1,257 US adults; context was mobile phone purchase)

Over the past couple years comScore has maintained, using a conservative methodology, that the percentage of search that is “local” is around 12%-13%. Product search is largely ignored in this calculation unless someone explicitly looks for a product with a geo-modifier attached (e.g., laptops, Jersey City).

But if at least 70% of Internet users doing product research are consistently buying offline/locally shouldn’t we consider at least 70% of the product search pie to be local? Perhaps these folks are open to buying online when they begin their research and so their “local intent” may not be completely conscious or “top of mind.” But the numbers are consistent across the studies. And e-commerce isn’t going to change anything in the foreseeable future; its growth curve has flattened.

Making the connection between search query and the store or POS (the “last mile of search”), as do companies like TheFind, NearbyNow and Krillion (among others like ShopLocal), only plays into the local side of the equation. Indeed, the failure to connect those dots represents a huge lost opportunity for marketers across the product spectrum. Retailers, for example, should be buying product keywords for all products they sell in stores and using geotargeting in search and on the ad networks to capture that shopper who’s ultimately going to buy offline. But, alas, few companies are doing that — let alone doing it well.

Back to the data. Just think how radical it is to say — and it’s true as a practical matter — that at least 70% of all product-related searches are local. It turns the whole e-commerce/local equation on its head.

Anyone want to disagree?

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7 Responses to “Shouldn’t Most ‘Product Search’ Count as Local?”

  1. Steve Espinosa Says:

    It all makes perfect sense, my only question being do both the studies transfer over equally. I totally believe that 92% happen offline, what I don’t know is do 92% of people who research a product online purchase online.

    For instance, if someone told me that 80% of people who still use MSN as their search engine also use the Yellow Pages for finding local businesses I would believe it.

  2. Greg Sterling Says:

    Not clear on your question Steve. The research shows that X% of people who are using the Internet for product research purchase offline. That “X” varies from study to study and category to category but the data are straightforward.

    A smaller audience is all the offline purchasers who use the internet for research before buying — but that’s growing.

  3. Stever Says:

    There is a lot of searching going on before a purchase is made. There is the initial research on the various products that might fit a need, then there is the price comparisons, and then maybe finding a local place to buy it. And not always in that order. So each individual offline purchase may average multiple online searches before the single transaction happens.

    And then there is the “window shopping” which takes on a whole new dimension online. Just browsing and wishing they could buy this or that, or maybe next year if they get that raise they are counting on.

    So coming to numbers of how to equate all those non-geo-targeted searches down to a local level will be difficult.

  4. Greg Sterling Says:

    Clearly and that’s why we don’t have those figures for the most part. But exposing the behavior and asking the question starts to reframe the debate about “local.”

  5. Google Maps now showing Local 10 Pack on Broad Non Geo Phrase Searches » Understanding Google Maps & Yahoo Local Search Says:

    [...] higher visibility is very positive and validates Greg Sterling’s view that research undercounts local searches and searches with local intent. One presumes that Google [...]

  6. Google Now Showing 10 Pack w/o Modifiers « Screenwerk Says:

    [...] local” (i.e., services where fulfillment must happen offline). Then I have argued that the majority of product searches are ultimately [...]

  7. What is Search Engine Optimization or Seo? | Intrepid SEO Blog Says:

    [...] Shouldn’t Most ‘Product Search’ Count as Local? « Screenwerk [...]

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