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):
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.
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?