Unsolicited Social Media Advice for Y!

I just got off the phone with someone talking about Yahoo! and social media, and that triggered some thoughts.

Yahoo! has been involved with social media for a long time. Yahoo! Groups and Answers are two early examples. There are also Flickr and Delicious and MyWeb (shuttered). And Yahoo! Local was one of the most “robust” user-generated local review sites in the pre-Yelp era. There was also the “smart in-box” Y! Mail strategy.

Yahoo! has thus enjoyed successes as well as failures and, in my view, seen some spectacular missed opportunities.

For example, back in 2006 I suggested that Yahoo! buy a blogging platform like WordPress or Six Apart. The company offered the relatively awkward Yahoo! 360 at the time. That service was subsequently shut down. And there are other examples of Yahoo! services shuttered before their time or insufficiently supported and emphasized (Yahoo! Fire Eagle is one of those, Neighbors is another).

Putting aside the rumored attempt to buy Foursquare, Yahoo! is planning on building out its social media assets further and reportedly going to be rolling out some new things in the coming months.

I think one potential acquisition the company should consider is Multiply. Originally a social network with a rich set of tools and capabilities, the site has become primarily a media sharing and storage site for adults/parents. Kind of an anti-Facebook, it would be a solid asset that Yahoo! could use and integrate with Flickr — and Shine, as well as other properties, I suspect.

Multiply has raised about $27 million in funding and could be acquired probably for under $100 million. Clicker is another company that Yahoo! should take a close look at because it’s social and cross-platform. And in some ways it’s a model of what Yahoo!’s social media strategy should be: a useful tool or content site, with community integrated into its fabric. RedBeacon would be yet another one. But direct involvement with lead-gen might not be where Yahoo! wants to go with its local strategy.

If Yahoo! hadn’t backed away somewhat from Shopping I’d also argue the site ought to get deeper into social shopping — a place where it was an early pioneer with the now dead Yahoo! Shoposphere. This sort of thing appeals to women in particular and is a very fertile area for promotions and advertising.

I’ll add one more: Yahoo! should look very seriously at the just-launched local coupon aggregator DealMap from Center’d. CEO Jennifer Dulski was GM of Local, as well as occupying other roles at Yahoo! before she left. She’d probably be ambivalent about going back but it would be a great asset for Yahoo! both in Shopping and Local.

Finally, in addition to any new acquisitions or product offerings, the company needs to exploit its existing assets. That includes renewed attention to Local (extending into mobile) and better exploitation of Answers in mobile.

Related: Yahoo! announced the acquisition of Associated Content. Below is the press release:

Yahoo! to Acquire Associated Content

Extending Leadership in Content With the Addition of 380,000 Contributors

SUNNYVALE, Calif.–(BUSINESS WIRE)–Yahoo! Inc. (NASDAQ: YHOO) today announced it has signed a definitive agreement to acquire Associated Content Inc. This strategic move extends Yahoo’s ability to provide high quality, personally relevant content for the benefit of more than 600 million users as well as tens of thousands of advertisers. As Yahoo! enhances its social, mobile, local, and media offerings, the acquisition of Associated Content reinforces the company’s longstanding promise to offer the best of the Web — by combining Associated Content’s approximately 380,000 contributors who provide rich and varied content on a broad array of passion points, with Yahoo’s leadership in partnering with established content brands and the award-winning team of editors and experts from Yahoo!.

“Combining our world-class editorial team with Associated Content’s makes this a game-changer,” said Carol Bartz, CEO, Yahoo! Inc. “Together, we’ll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we’re one of the most visited destinations online.”

“The Associated Content team and our 380,000 contributors are looking forward to joining Yahoo! and to the opportunities that being part of a global Internet brand presents,” said Luke Beatty, Associated Content founder and president. “Combining our crowd sourced content with Yahoo!’s distribution, world class editorial team and online marketing leadership will accelerate our growth as we continue to leverage our best-of-breed platform to deliver high quality compelling content on more than 60,000 topics.”

For advertisers, this deal will expand Yahoo! into more topic areas and real-time content generation. The combination promises to offer advertisers even more opportunities to engage groups of passionate consumers in ways they will find uniquely appealing to their interests and tastes. Having insight into user intent through its leading search products enables Yahoo! to identify topics important to advertisers and users. Yahoo! plans to use Associated Content to create content around those topics and leverage Associated Content to contribute content to existing media properties. Associated Content also provides more opportunities for Yahoo! to partner and collaborate with publishers who can help the company shape the tremendous variety of content coming in, into something bespoke and even more engaging.

While current Associated Content content is U.S.-centric, Yahoo! expects to scale the platform globally.

Associated Content was founded by Luke Beatty in Denver, Colorado, in 2004. Associated Content receives more than 16 million unique users per month (comScore) and the editorial staff reviews more than 50,000 pieces of content per month, including articles, images, audio and video.

Yahoo! expects to complete this acquisition in the third quarter of 2010. Financial terms were not disclosed.

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More on Facebook, Privacy & Data Mining

Here are two unrelated pieces on Facebook that I ran across nearly simultaneously:

• An Online Alias Keeps Colleges Off Their Trail
• Facebook VP: Why We Want Marketers to Like “Like”

The first is from the NY Times, about how high-school students and college applicants are trying to make it harder for colleges to find them on Facebook (using aliases), for fear of the adverse consequences of institutions knowing too much about them:

For high school students concerned with college acceptance, Facebook presents a challenge. It encourages making public every thought and every photo, an opportunity for posturing and bravado nearly irresistible to teenagers. But this impulse for display clashes with the need to appear circumspect and presentable to college admissions agents, who some high school guidance counselors have warned are likely vetting applicants by trolling the Web.

Whether admissions officers really do plumb Facebook is up for debate, said Dr. Frank C. Leana, a prominent independent college counselor in New York City whose services cost $1,000 (for a one-time consultation) to $9,000 (for ongoing counsel throughout the college process). His students believe they are being watched, he said, but “it’s really hard to know how accurate their suspicions are.”

One of the big pitches for the Open Graph is “making the Web less anonymous,” more transparent. But Facebook being the de facto identity management platform across the Internet is not so desirable to everyone, as the above article suggests. And young people do care about privacy it would appear — or at least that third parties not be able to access their information.

Real and open identity is good as an abstract matter until the “big brother effect” kicks in and others are passing judgment and denying jobs or college admissions, potentially because of one-too-many drunken party images on Facebook. While there’s no documentation of the latter, the fear is clearly present.

The second article, an interview of sales VP Mike Murphy by eMarketer, reveals some of Facebook’s ambitions surrounding data mining and ad targeting vis-a-vis the “Like” button. Here’s eMarketer’s summary conclusion of Murphy’s comments:

Whenever a person clicks to “like” something they see on the Web, that information will go into their Facebook profile and marketers will be able to use the information to target advertising within Facebook.

This is a key point: all off-site “Like” activity will factor into targeting on Facebook. In other words, Facebook is mining actions across the Internet for targeting on its site. Brilliant and/or creepy? A little of both I think.

What many (most) people don’t realize also is that “Liking” something across the Internet will enable marketers or publishers to push content and “publish into [users’] news feeds.” This requires prior approval but it may not be clear that people are signing up for an ongoing stream of information or marketing messages.

Clarinova: The Rebirth of StepUp?

I spoke to the founders of Clarinova a couple of weeks ago and last week the company formally put out a press release announcing its existence. As I heard them describe their relationships with product makers and brands and their efforts to build websites and manage them for independent local retailers I was strongly reminded of StepUp, which sold several years ago to Intuit for $60 million.

Clarinova builds microsites for individual brands and their corresponding local retailers. Effectively the firm tries to help people locate places to buy products offline, but there are some interesting other angles as well.

Here’s how Clarinova describes itself:

Clarinova is a collaborative marketing company working with manufacturers and retailers to grow and satisfy market demand for manufacturers’ products by creating a powerful online presence. Clarinova bridges the gap between creating a brand and making certain it is well-represented on retail websites and across the Internet.

On a standalone basis or in conjunction with your existing Web marketing staff, Clarinova adds greater efficiency to your operation by creating a systematic path for your brand to increase visibility rapidly across the Web. We help retailers and consumers find you—on shopping websites, search engines, comparison engines, social shopping sites, and retail store websites. Clarinova’s Front Window platform advances your online branding efforts so you can focus on the rest of your job.

Because this is in large part about the brands and manufacturers, only a single brand is showcased on any individual store microsite. Consequently a store that carries multiple lines and brands would thus have multiple microsites (and all that implies for SEO). Here are examples of three different actual microsites for three brands all sold at the same store:

Clarinova said that its one-brand-per-site approach wasn’t a problem for the independent local retailers, who appreciated the promotion. Furthermore, the company believes that it has tapped into a large retail segment that represents 80,000 manufacturers and distributors, their 270,000 retailers, and $76B in US retail sales.”

Because the company works directly with brands/manufacturers, Clarinova also has some decent visibility on in-stock items at independent retailers, though the systems (or lack thereof) in use make real-time inventory determination a problem. But because the company knows when and how many products have shipped and generally how long they remain in stores, there is some probabilistic calculation that could go on. But real-time inventory is not the thrust of the company’s immediate efforts.

Clarinova is working with brands to help consumers, using search engines, find local stores where they can buy products. It’s quite a bit more involved and sophisticated than a pure store locator strategy. It doesn’t rely on the consumer finding the brand’s website and then finding the store in his or her area. It “syndicates” that information out through search to the broader Internet. And there’s lots of SEO value for both the stores and the brands here.

In terms of competition, there are general Web design firms and several companies (Krillion, Milo, NearbyNow, Google) working on real-time product inventory. And there are lots of firms providing local marketing services to local service businesses. But there isn’t anyone doing exactly the same thing that Clarinova is: working with manufacturers to bring small retailers online and connect buyers to their local stores.

It’s another example of the momentum building to help deliver consumers from “Web2Store.”

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Related: Here’s Clarinova’s overview deck on SlideShare.

Milo Will Show BestBuys with iPads

For those who interested in finding BestBuys that have iPads in stock tomorrow, Milo will apparently be showing real-time inventory according to a press note I got last night. I searched and the data aren’t there yet but maybe by late tonight early tomorrow am.

The Dark Side of Groupon Sites

Let me just say up front that this post is based on the experience of a single restaurant owner and should be taken in that context. However I was quite surprised, yesterday, to hear the individual’s experience with Groupon, after I brought up the group-buying phenomenon. I’ll paraphrase what I was told by the owner.

This particular restaurant, located in the middle of the country, had just opened and needed customers. It also had gone over its construction budget and was short of “marketing” dollars. So it turned to Groupon. Initial promotion suggestions from the restaurant were reportedly rejected by Groupon as being insufficiently aggressive. The final, accepted, promotion was very aggressive, such that the owners feared there might be no margin on these Groupon customers.

I was told that while businesses can specify a minimum threshold of customers, required to honor the offer, they cannot specify a maximum or cap the number of respondents. This created fear that there would be 1,000 takers of this particular deal. It turned out that there were just under 500, according to the restaurant owner.

One one level this is a great result: 500 new customers potentially to spread the word and become repeat business. This was the owner’s precise objective.

I asked if he had tracked these new customers and determined how many repeated. The owner said no. I also asked whether they “got the list,” the email addresses of those taking advantage of the offer. He told me that Groupon wouldn’t give him the list, which I found literally shocking.

The restaurant owner’s experience ultimately turned out fine and the promotion “worked” in terms of getting people in the door. But he also speculated and talked about the experience of smaller service businesses such as hair salons or dentists, which must service customers in a serial manner.

He said that his wife had, as a consumer, taken advantage of one of the Groupon offers in connection with a salon. She called and couldn’t get an appointment until many weeks later — the demand was so great. If there are 300 customers who take advantage and make appointments right away that may suck up an SMB’s time for weeks. Imagine weeks of work with very thin margins.

The restaurant owner complained that “there are things Groupon doesn’t tell you.” He said the restaurant’s website got hit with tons of traffic and their phone was ringing off the hook. “You basically have to become a call center,” he said, after the deal hits. “Most small businesses aren’t prepared for something like this.”

But he did appreciate that Groupon offered “pure performance marketing” as opposed to clicks and even calls, which were more speculative. He obviously didn’t like some of the Groupon policies (i.e., not divulging emails, lack of a cap) and the lack of education or information to prepare for the experience.

Assuming that this story is accurate it seems to me that the “group buying” model as presently constituted is unsustainable. Consumers love these deals but SMBs are going to become increasingly ambivalent about them. They “work” in that they get people in the door in a very direct way. But unless that initial foot traffic is smartly leveraged and there are repeat visitors or great word of mouth the value of that initial frenzy is minimal and debatable.

As more Groupon-like sites seek to gain consumer attention there will be an effort to get deeper and deeper discounts from businesses. As an initial matter that may work, but over time this may backfire and undermine the ability of these sites to get businesses to participate. It’s also largely a one-shot deal. The restaurant owner I spoke to probably wouldn’t go back to Groupon because of the limited margins.

Platforms like Perry Evans’ new Closely represent a similar model but enable the SMB to control the flow of promotions and set their terms.

Graphic Comparing Online to Offline Buying

Here’s a nice graphic from the folks at Milo.com showing the percentages (based on US govt. data) of shopping and buying that occur online vs. in store by category (click to enlarge):

All the offline numbers are in the high 90s.

Forrester Looking at Wrong End of Commerce

The WSJ and TechCrunch cover Forrester’s relatively bullish e-commerce forecast. This is from the WSJ:

In 2009, e-commerce in the U.S. managed to buck the recession that dragged down the rest of retail, growing 11% to reach $155.2 billion, according to Forrester Research. The research firm is predicting in a report out Monday that e-commerce in America will grow another 11% this year.

The Forrester e-commerce number from 2009 — 6% of total retail sales — is inflated. Forrester uses a smaller sample than US government data, which shows e-commerce at 3.8% of total US retail sales (in Q4).

Here’s the more interesting part of the Forrester data, as reported in the WSJ:

And a new area of focus for retailers isn’t online buying at all. Rather, it us using the Internet and mobile technology to influence sales that happen in stores. Already Forrester’s study found that 42% of all retail purchases in 2009 – worth some $917 billion – were influenced by the Web in some way. By 2014 that figure is likely to jump to 53%.

These figures are probably off as well. The online –>offline number should be larger. Recall that Compete/TNS conducted a survey in which it found that 94% did research online prior to (online) purchase. Prior studies by comScore, BIGResearch, Yahoo! and others have found 80% to more than 90% of consumers buying in-store have consulted the Internet for information prior to purchase.

The challenge, in gaining a true picture of consumer behavior, is measuring this online–>offline impact on a campaign basis. There are various methodologies to try and get at this: call tracking, coupons, surveys, sales lift, attribution modeling.

Ironically, as I’ve said in the past, mobile will likely boost e-commerce as people visit stores to check out products and then buy online if they find a better price.

Milo Adds Real-Time Sales/Pricing Data

This is a winner: Milo in addition to providing inventory data for local stores is now offering real-time pricing and sales alerts information:

Milo.com – the Web site that enables shoppers to research online and buy local – is helping its users shop even smarter through the addition of real-time sale prices on more than 2 million products at national and regional stores throughout the country. Shoppers are now able to search over 100,000 local sale prices each day and filter by category and merchant across 48,000 retailers, ranging from Best Buy to Blain’s Farm & Fleet.

Milo isn’t the first or only shopping site to provide price alerts, but it’s a nice addition to the company’s other data and features.

Compete: 94% Do Online Research Pre-Purchase

A week or so ago Compete released some data showing how consumers use multiple sources of information prior to making a purchase and how those sources may differ by category. One interesting stat from the survey data that jumped out at me was the following:

[O]nly 6% of consumers surveyed as part of the Online Shopper Intelligence study indicated that they conducted no research prior to their last online purchase.

In other words, 94% did online research before making an online purchase.

While the context here is online purchase behavior, we can reasonably assume that this behavior is equally applicable to the far more common practice of buying offline. Most purchase behavior occurs offline (e-commerce is less than 4% of US retail) and these online buyers are not going to behave differently when they buy in physical stores.

Prior studies by comScore, BIGResearch, Yahoo! and others have found 80% to more than 90% of consumers buying in-store have consulted the Internet for information prior to purchase: ROBO.

Here’s another interesting piece of data from the Compete survey, showing the continuing popularity of coupon sites.

Source: Compete, Inc. 2/10.

Could Facebook “Own” Shopping?

After the recent acquistion or merger of social shopping/fashion sites ThisNext and Stylehive, I started thinking about Facebook and Shopping.

Facebook is the new Google in the sense that it could hypothetically “own” market segments/sectors if the company devoted itself to doing so. (This was until recently the belief about every new area Google entered.) For example, TechCrunch writes about a new “full featured” webmail being developed at FB — the implication being that it would be highly successful and potentially threaten other webmail clients (read: Yahoo).

Facebook isn’t a good fit for all use cases. But it is for some. Shopping is one of them in my mind. Hearst-owned Kaboodle is perhaps the most effective of the “social shopping” sites but it’s still “under the radar” for most folks.

I conducted a little poll on Facebook the other day and asked people: “If Facebook were to develop a shopping site that offered products or discounts on products would you use it?” I didn’t get many responses, which either says something about me or Facebook. But “discounts” is the key word in that sentence.

Think about a deal of the day (LivingSocial) or group buying (Groupon) or simply a deal center (e.g., RetailMeNot or Ask Deals) featuring money saving offers or incentives that are then broadcast back to others via news feeds. This sort of thing I believe (assuming it’s presented well) would be a massive hit.

Agree or think that Facebook is just for “silly fun”?

Every 13th SERP on Google Shows a Map

Mike Blumenthal showed me a Google blog post I’d missed. Among other data from Google it said, “Proportion of Google result pages that show a map in search results: 1 in 13.” If you do the simple math, that’s just over 7% of pages, but it’s hundreds of millions every month out of about 9.7 billion search queries coming through Google in the US in December. 

This is a striking number but it’s important to note that it doesn’t define the entire universe of “local search” on Google. In the past comScore has said about 12% of search queries are local. But the company uses what I would describe as a conservative methodology to calculate this number. In particular it doesn’t capture general search queries without a geographic modifier (e.g., “dentist”), for which Google is now often showing a map and local results. 

My belief and argument is that “local intent” searches should be counted as those that result in an offline transaction or must be fulfilled offline. That’s hard to measure of course. But it would encompass all or the overwhelming majority of real estate, restaurant, events/entertainment and services type searches at the outset.

I would also argue that because 96.3% of US retail is offline, that more than 90% of product related queries are ultimately local. They may not be “inherently” local because one can buy most goods online. But product research typically results in an offline transaction and so these searches should be considered local or implicate local at least.

As the inventory database proliferates online and in mobile this consumer behavior will become increasingly transparent. Smartphone user behavior again confirms that consumers are looking for places to buy things offline, in the real world (click to enlarge chart):

Source: Compete, Inc., Q3 2009

Once again it doesn’t matter what percentage of search queries are local as an abstract principle, the vast majority of consumer spending is offline. The Internet (and mobile) are instrumental in that consumer shopping and research process. The Internet is a marketing platform that influences offline consumer buying.

That’s the bigger picture that we need to focus on.

More Online-Offline Research

The following comes from a large Motorola-sponsored holiday shopping survey. More than 4,500 respondents, it was fielded in North America, Brazil, Europe and China. Just under half the survey respondents were from the US. 

You can click to enlarge but at the bottom it says: “Almost all shoppers (93%) used the Internet prior to going in-store to research prices and information of various products.”

CitySquares Buys Local Shopping Site Yokel

Over the weekend CitySquares CEO Ben Saren sent me an article discussing the company’s acquisition of local shopping engine Yokel. This actually happened some time ago I believe. The company is now going public about it. CitySquares discusses it at a very high level on its blog:

We are excited to announce our recent acquisition of Yokel.com, an online retail directory that has made local shopping simpler than ever since 2005. With just a search term and a geographic location in mind, a visitor can find which local businesses sell a particular product or brand. This is an innovative idea and will be a great asset to CitySquares, because it not only connects neighborhood customers to the businesses in their area but also to the specific products sold in each store.

This site was founded by local search veterans Scott Randall and Don Zereski who both wanted to make local shopping information more accessible online. Together, these two masterminds created the clever software behind Yokel.com, which today has over 2 million retailers on the site.

I wrote about Yokel when it first launched in 2006 (and many times thereafter):

I spoke today to Scott Randall, CEO of Yokel. Yokel has been around for a little while but hasn’t formally launched yet. Yokel joins ShopLocal, CNET and Froogle in offering offline inventory/shopping information to online consumers. So far, there’s no e-commerce. Another competitor in the space, Local shopping aggregator Cairo.com, has shut down following its legal settlement with ShopLocal.

Yokel didn’t get the traction of Krillion or NearbyNow, neither of which primarily aimed to be consumer destinations, which Yokel was trying to be. However it will be interesting to see the integration of Yokel and CitySquares (or whether/how they’ll be integrated). It sounds like they will be.

Now that Google has returned to offering (or intending to offer) local inventory data, and now that shopping on smartphones is becoming fairly well established, this becomes a very interesting acquisition for CitySquares. While Superpages and Yellowpages.com have integrated Krillion (albeit in a nearly invisible way) none of the independent local sites has tried to do something with retailers and local products.

I’ve long discussed that this represents an opportunity to build out a more complete local offering — although not easy to execute. But Yokel provides CitySquares with a terrific start.

See also “Report: People Using Smartphones for Shopping, Not Buying”

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I just spoke to Ben Saren about the acquisition. He told me that while the companies had been talking for some time, the deal only closed recently.

Saren said that they would maintain and upgrade the Yokel site in the near term. He also said they were going to be exploring a variety of ways to integrate the Yokel content into CitySquares and use the crawling technology broadly to enhance the range of local content (beyond products) on the CitySquares site.

Saren and I discussed how this potentially opens the door to an entirely new opportunity (and model) for CitySquares around product search. In the next couple of months when Google debuts its local product search, the phenomenon will gain broader awareness. Yokel could well be in a position to benefit from that.

Saren said the local product search space feels like local search five years ago. Indeed, we’re at the beginning of something very interesting around product inventory information, with mobile as an integral part of all of it.

Social: Not That Hard to Figure Out

Recent comScore data points out that social media are having an increasing influence on shopping and consumer purchase behavior:

Social media (a descriptive yet still ambiguous term) is often treated like it’s a mysterious thing. It’s not. You have several major distribution points online where people are interacting — among them Facebook and Twitter. Reviews and recommendations (word of mouth) are being disseminated in many cases through these distribution points. People are getting the information and taking action accordingly. Twitter for example has become an important distribution point for deals and coupons.

People fundamentally want credible information about products (and services) — rather than ads and claims — and they want to save money. Consumers are finding this information on social media sites, among other places online. Makes sense.

Companies lag in figuring out how to utilize these tools and platforms effectively and w/o the BS/PR spin they’re used to conveying in the world. That’s the major “cultural” obstacle for them. They mostly don’t know how to operate in the world with authentic, direct communication, which is what the Internet now demands for success in social media.

But if you’re a company that just can’t overcome the caution inherent in most corporate cultures, and you don’t want to be “authentic,”  you can always offer deals and discounts on Twitter as an alternative.

Milo.com Hits 1M Users

I wrote up the announcement that Milo.com was out of beta with 1 million users over at SEL (also a bit of broader context and perspective too). Here’s a TV segment featuring Milo.com’s Jack Abraham:

Beyond the fact that it’s always interesting to see and hear entrepreneurs, the most interesting thing about this video is the way the whole thing is positioned and explained by the host of the segment.

Krillion Powers Topix ‘Best (Local) Deals’ Widget

Krillion and Topix announced a deal in which the former will provide a new “e-circular” on Topix pages that correspond to local stores (mostly big box) in specific geographies:

[T]hat dynamically presents real-time deals on local, in-stock products to the thousands of people that visit the Topix local news and community forums each day. The new e-circulars, which are powered by local product search leader Krillion, are automatically matched to the ZIP of any local content page, and exclusively feature popular ‘best buys’ from local retailers that have that product in stock at that moment.

Here’s what it looks like on the Topix site:

If you click through on any item you go to the retailer’s site directly. Clicking on the “powered by” link takes you to a Topix-branded page for the zip that shows all the available deals:

Obviously I think this is valuable information and desired by consumers (see my earlier Google Products post). Another interesting thing here is the use (in PR materials) of the phrase “real time” in connection with this data.

I think product inventory information could hook into this buzz-worthy trend and be comprehensible to consumers. Generally I don’t believe that consumers have a handle on (or care yet) what “real time” means. But it does mean something where product inventory is concerned: “where can I buy that today?”

Google to Add Local Inventory to Products

Buried in the announcements coming out of the Google Search “Evolution” event that happened yesterday was one about local product inventory coming to Google Product Search (online and in mobile). Because there were bigger and sexier announcements most of the coverage has neglected this little detail, which Engineering VP Vic Gundotra said would happen next year. 

Google Product Search (formerly Froogle) has been a kind of “sleeping giant” in online shopping for quite some time. But the company has largely failed to take advantage of its opportunity and provided a very lackluster product. Indeed it created a big opening for Bing, which sees shopping as one of the “four strategic verticals” (Local, Shopping, Travel, Health).

More recently, however, Google has been upgrading the product search experience and added a range of improvements and new features. Some might argue this is all a response to Bing. But they have been a longer time in coming, though perhaps accelerated by Microsoft’s competitive moves. 

Among the recent Google Product Search upgrades is “nearby stores,” which shows physical store locations rather than product inventory. But that’s about to change according to the largely unnoticed zinger from Gundotra. 

I don’t know who Google is working with or whether they’re doing it on their own; but the addition of product inventory information (both online and in mobile) is potentially a major development. We’ll have to see what shows up. 

Google doesn’t make any money off paid inclusion or clicks within results; it monetizes the traffic by placing relevant ads around results. It also obviously shows product ads on Google.com SERPs. 

Most of the big shopping engines (save one or two) are doing search arbitrage or trying to use SEO to get traffic — essentially because they have no brands and limited consumer awareness — that they then resell as highly qualified. As you know most people do pricing and reviews lookups (research) online and then buy in local stores. The online buying is dominated by familiar brands, multi-channel retailers (e.g., Target) and most notably Amazon. The no-name etailers and shopping engines see traffic and clicks but fewer actual “conversions” for the aforementioned reasons. Even eBay is under increasing pressure and is struggling to boost traffic and growth. 

Source: Hitwise, November 2009

So what happens if Google does a good job with local inventory information? (which has literally been on the company’s radar for 5 years or more). As an aside, the reason local inventory data wasn’t added at Google before is because of a lack of scale. This soft announcement yesterday suggests that Google now has a way to do it at scale or at least has revised its expectations in the near term. 

If what shows up at Google Product Search in the form of local inventory data is prominent and effective it may put Google Product Search in the top tier of online shopping experiences and spell bad news for the Shopping.com’s of the world (owned by eBay). Companies like Krillion would be in a strong position — they’re already talking to everyone — because local inventory information would start to become a “defensive” necessity. Milo, as well, would/will see many BD calls and/or suitors come knocking. NearbyNow has this data but has changed its model to focus on mobile app development for magazine publishers. ShopLocal also has a version of local inventory information in its circular data. 

Another reason that Google would be in a strong position is because of its mobile assets. Among the major e-commerce players and shopping engines, Amazon offers the most complete mobile experience. It has terrific iPhone and Android apps (Amazon Remembers/SnapTell). Shopping.com also has a nice site. But the larger point is that the PC-mobile shopping crossover will get stronger and stronger. And increasingly “online shopping” will feature the following scenario: I’m standing in front of a product in a store with my smartphone. Here’s what I’ll want to see:

• Pricing information
• Reviews
• Discounts/sales information
• Other, comparable products
• Where else might I buy it in my area

The addition of local inventory data combined with Google’s ability to refer traffic to itself (think Maps) could become highly “disruptive” for many online shopping players — provided that Google continues to improve its online shopping experience and leverages its PC–>mobile advantages.

Black Friday into ‘Cyber Monday’

Somebody really needs to invent another term for “Cyber Monday.” Cyber connotes Sci-Fi (as in the 1980s novel Cyberpunk) and the Internet is now more like a toaster than something otherworldly.

Anyway, e-commerce and offline sales were pretty decent according to various reports out this weekend and this morning. The NY Times reports:

Consumers began looking for discounts early, with more of them visiting stores this year before dawn. An estimated 31.2 percent of shoppers were at stores by 5 a.m., compared with 23.3 percent who were at stores by that time last year, according to the federation’s survey, which was conducted by BIGresearch . . .

The National Retail Federation said shoppers’ destination of choice appeared to be department stores, with almost half of holiday shoppers visiting at least one, a nearly 13 percent increase from last year. Discount retailers were also top choices, attracting some 43.2 percent of shoppers.

As for online sales, comScore, the Internet research company, said retail e-commerce spending for the first 27 days of the holiday season, this year Nov. 1 to 27, rose 3 percent, to $10.57 billion, compared with the period last year. Online sales on Friday were $595 million, up 11 percent from last year.

The most popular purchases of the weekend were clothing and books, according to the federation. And many more consumers bought toys, up nearly 13 percent from last year. More shoppers also bought sporting goods, beauty items and gift cards. The NPD Group said its research showed the three hottest categories to be electronics, clothing and movies.

Here’s more on the comScore data:

A national retail federation survey shows that people also plan to shop online this week but much of the behavior, which originally took place at work (on Monday) because of high-speed connections has now shifted to home (where “broadband” is now prevalent). Just as with offline sales much of that behavior will be driven by deep discounts and special promotions:

A survey released last week found that nearly nine in ten (87.1%) retailers will have a special promotion for Cyber Monday, up from 83.7 percent last year and 72.2 percent in 2007. The most popular promotions are expected to be specific deals (42.9%), one-day sales (32.9%), and free shipping on all purchases (15.7%). Half of retailers (50.0%) will distribute promotions and deals to shoppers through a special Cyber Monday email.

While some Cyber Monday shoppers will choose to shop from the office, the large majority will shop from living rooms and kitchens all across the country.* According to the survey, 91.5 percent of Cyber Monday shoppers – or 88.2 million Americans – will shop from home on Cyber Monday while 13.5 percent, or 13 million people, will shop from work. (A Shop.org/BIGresearch survey released last week estimated that 69 million Americans would shop from work at some point during the holiday season.) 

According to the survey, 3.8% of people will use mobile devices on “Cyber Monday” (5% of men and 7.3% of 18-34 year olds). 

Shopping engine TheFind reported a significant increase in mobile lookups on Friday:

Searches from mobile devices jumped from around 5,000 on Black Friday in 2008 to roughly 200,000 this year, said Siva Kumar, chief executive of TheFind.com, a product search engine.

According to Hitwise, Amazon was the most visited site among the top 500 retail sites on Friday:

• Among the top 500 Retail Web sites, the percentage of U.S. visits were up 4% on Black Friday 2009 versus Thanksgiving Day 2009. Year-over-year the visits were down 9% compared to Black Friday 2008. The U.S. traffic to Black Friday sites on  Black Friday was up 9% compared to 2008.
• The top visited Retail Website on Black Friday 2009 was Amazon receiving  13.55 % of U.S. visits among the top 500 Retail Web sites. This is the second year in a row that  Amazon was the top visited site on Black Friday.
•  Wal-Mart was the second most visited with 11.18 % of visits followed by Target.com with 5.65%, BestBuy.com with 4.62%. followed by Sears with 2.95%. 

Source: Experian Hitwise

I would argue that to this day, other than the traditional retailers, Amazon (maybe eBay) is the only online shopping “brand,” hence the traffic and sales. I would also argue that a large percentage of the traditional retailer site visits is “multi-channel”: people checking prices before heading into stores to buy items. 

Just to “check out the scene,” and to get my hands on a Motorola Droid, I went into my local Best Buy on Friday; it was a complete madhouse. I saw people doing price checks and lookups on smartphones and saw one woman using a barcode scanner app on a TV price tag to do the same.

Placecast Gains $5 Million in Series B Funding

1020 Placecast has raised $5 million in Series B funding “from a group of high-profile investors including Quatrex Capital and current investors Onset Ventures and Voyager Capital.” The company is going to grow its LBS mobile platform efforts accordingly.

The press release says that the funds “will be used to accelerate progress on the company’s opt-in location-triggered marketing capability, which enables brands to engage with consumers via mobile phone based on the user’s specific location.”

Placecast has been doing a terrific research/anecdotal series entitled “The Alert Shopper” about how people shop and think about media in relation to shopping. Below is a video that illustrates their opt-in mobile marketing approach:

Recently in a survey conducted by Harris Interactive, on behalf of 1020 Placecast, large percentages of respondents said they highly receptive to mobile advertising in the form of alerts after an opt-in to receive them.

These data show why SMS marketing will never be supplanted by apps, search or mobile Web. Each has a role to play but SMS alerts will be a central part of mobile marketers’ customer acquisition and loyalty strategies for some time to come. Expect more integration of these mobile ad/marketing efforts in the future however.

Apple’s New ‘Reserve & Pick Up’

Apple has introduced a new online-offline shopping capability for the holidays — Reserve and Pick Up:

The ad copy:

Reserve an iPod or Mac online today and it will be waiting for you to pick up and purchase at an Apple Retail Store from December 15 to 24. You can even have many products wrapped.

It doesn’t seem to include the iPhone in the capability . . . but it’s still very smart.