JERSEY CITY, NJ — The prevailing idea that local search will benefit small businesses is true, but only if providers can tailor their offerings to the unique needs of the market, according to a panel of local search experts at the Kelsey Group’s Interactive Local Media conference. At the same time, the experts said, providers must heed consumers’ desire for choice.
“Part of the challenge is to get these millions of businesses online. That’s going to be the trick,” said Dave Hamel, CMO of CrossMedia Services, the parent company of ShopLocal.com.
Smaller merchants are used to being serviced as advertisers in other media. When they buy media like radio and newspapers, the media company often builds the ads for them. Hamel said this is an important factor in serving small business advertisers, who may be too busy to figure out the best way to market and present their product.
“The challenge is how to get the masses online without forcing them to become experts,” he said.
Hamel noted that there are exceptions in small businesses, with savvy marketers present in companies of all sizes — but those are not the companies that need coaxing to advertise online.
ShopLocal accomplishes this by selling its service through partnerships with newspaper publishers because they have relationships with local advertisers. This type of partnership, such as Google’s partnership with BellSouth, is becoming more common.
While the high-touch approach is something that small businesses are comfortable with, Kendall Fargo, president and CEO of StepUp.com, thinks it is only a transitional approach. “Eventually, we want to have something that never needs salespeople to be involved. For anything to happen, it’s going to have to be automated,” he said. “Retailers will only continue to use a system long-term if it’s hands-off.”
On the consumer side, Fargo is convinced there is a market for services that allow users to shop online and buy offline. There are certain people who want to buy locally, and certain situations that lend themselves to local shopping, he said.
“Some people prefer to see a product in person before buying it, they want to hold it in their hand and touch it. Or they don’t want to pay to have it shipped,” Fargo said.
Fargo believes that the convenience of buying locally can sometimes override a lower price from an online merchant. Many people will bypass the lowest-cost merchants on a shopping search engine if the merchant has a bad reputation. In the same way that shoppers are often willing to pay a premium for the convenience of trust, they will also pay a moderately higher price for the convenience of local, he said.
AOL has learned something about consumers’ desire for convenience. The company previously took a “walled garden” approach to shopping, only showing its subscribers offers from top brand retailers, said Bill Bradford, executive director of e-commerce product marketing at AOL. It became apparent that shoppers were not satisfied with the choices being offered, so they had to go elsewhere to shop, he said.
“Part of what consumers tell us is that they want the Web to be a comprehensive list of everything out there. They’re expecting search engines to do that for them,” Bradford said. “What they told us was, ‘Give me a Web-wide look at what’s out there, but at the same time help me to pinpoint what I want.'”
AOL now has more than 46,000 sources in its newly launched In-Store shopping channel. The makeup of partners roughly follows the familiar 80/20 rule, where 80 percent of the business is driven by 20 percent of the partners, he said. But the size of the company is not as important to its success, he said.
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