Online is finally connecting with offline inventory, and to local results.
Under the best of circumstances, it's not easy being a marketer. Throw in online marketing's perpetual evolution and several highly competitive verticals, and you begin to understand why we grind our teeth and can't sleep. Of course, there's a reason we do it: we love it. I can't recall a dull news week in the last two years. Constant innovation means I have new job every year, like it or not.
Perhaps that's what drew me into the dot-com world. In my last position, I worked with a comparison shopping engine. I recall a conversation by fax machine with a former CTO, sometime around 2001. We were contemplating what the ultimate evolution of the company might be. It involved a consumer simply imagining all the considerations related to a need and the resources to address that need in the context of her life. Given all those factors, the most efficient option to solve it would then be presented.
A little sci-fi, but the idea is that instead of logging on; comparing prices, features, and ratings; then checking inventory and the reliability of the stores, the decision is automatically made. The product magically appears at your doorstep without any concern over the transaction's success; absolute satisfaction from a single thought. It was an interesting exercise. By considering the end, you can look more purposefully at the means to accomplish it.
We're certainly not there yet. Not even close. Many of those ideas are now located in backup storage (and landfills). Yet it's interesting to see the early forms of some of those ideas begin to appear. For example, one of the major hurdles facing click-and-mortar retailers has always been offline conversion.
According to a 2005 Forrester report, 42 percent of Web analytics users surveyed import data from other customer touch points, such as POS systems and call centers. This is nearly double the number that did so in 2004.
While most marketers still aren't pulling together fully integrated customer views, [Forrester analyst Bob] Chatham notes progress in that direction. 25% of those surveyed correlate user survey data with site analytics to build customer profiles that link attitudes with behavior. 36% said they export site analytic data to a corporate data warehouse, while 39% cross-match site registration data with clickstream data, according to the report.
It's a start. Yet retailers continually struggle to accurately measure the impact of online marketing dollars and consumer research behavior on their offline sales. Sure, we have anecdotal studies and plenty of survey results from dozens of organizations that have vested interests in the space, but actually measuring the impact is only beginning to emerge from the dark forest of elaborate modeling and other estimations.
Data is being collected from call centers using unique toll-free numbers, coupon redemption, in-store kiosks, and POS surveys on register receipts. The major challenge is how to reliably and consistently connect anonymous on- and offline identities. This may not be solved anytime soon.
So where does this leave us? We know the information people seek when shopping isn't limited to online stores. They don't just want a store location from their laptops. Shopping's headed for their mobile phones. The on- and offline worlds are coming together in new ways for retailers. Companies are seeing the stats and understanding there is a correlation.
JupiterResearch predicts online's influence on offline sales will soon outpace sales that take place online: "Driving this growth are the 85 percent of online shoppers who said they used the Internet to research their offline purchases in 2005." In fact, it anticipates nearly half of retail transactions will be influenced by the Internet by 2010.
A comScore study sponsored by Google revealed "25% of Web searchers bought an item directly related to their Web search. Among that group, 63% completed their buy offline in some manner, either in a retail store or over the phone; only 37% performed their entire transaction on the Web."
Integration is on our doorsteps. This means more than in-store pickup, store locators on Websites, and gift cards you can redeem online. It means meeting the expanding consumer demand for information before purchases, many of which occur offline. Forrester touches on this in a multichannel retail study showing 54 percent of online consumers researched online but purchased offline, with half of respondents indicating price comparison as the driver.
Still wondering how this connects with local search? We're finally seeing online comparison shopping merge with local offline comparison shopping in beta products like Froogle Local Shopping. Here's a search for "digital camera" in my Zip Code. ShopLocal (which reportedly powers the Google beta) provides similar results.
Marching down a similar path is Channel Intelligence, which powers CNET Shopper's local results. Try this result for an HP Pavillion laptop. Channel Intelligence also works with a number of companies to provide results that show offline inventory. Check out the results for the Kodak EasyShare V570.
Online is finally connecting to offline inventory and local results. Numerous companies are attempting to solve this problem. One even allows barcode searches via mobile phones to compare prices. The tools that online shoppers find so satisfying are finally joining with the offline universe. Directly measurable or not, we're moving forward.
For traditional marketers, the term "fragmentation" has been a nuisance, given all of the emerging opportunities. For online marketers, the term carries a great deal of promise. These channels were nothing but static before broadband brought them to life. Soon mobile will do the same. And if you believe the hype, you'd better believe local results will be a part of it. Borrell recently released a report on local online ad spending, which predicts a 21 percent increase to $5.8 billion this year. It also points out the shifting market share toward national search engines to reach local audiences.
As I said, never a dull news week. And if you get a chance, check out the recent "BusinessWeek" article on local search.
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Specializing in search and online marketing, Phil Stelter is the director of business development for Range Online Media, one of the fastest-growing search marketing agencies. Phil has over eight years of experience in search marketing and Web site production for major sites across industries including travel, government, non-profit health care, and retail e-commerce. He's guided SEO and PPC campaigns in-house and from the agency side. Today, he evaluates new technologies, directs online marketing campaigns, and develops innovative search solutions for industry-leading online retailers and travel services such as Travelocity and other Fortune 1000 companies. Phil is a regular speaker and presenter on online advertising and search marketing topics at leading industry trade shows and conferences. He's a graduate of Claremont McKenna College, where he received a BA in International Relations and French.
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