A new report from Accenture confirms much of what we already know to be true: that the majority of online product research leads to offline conversions.
Specifically, it reported that 67 percent of survey respondents prefer to make purchases in physical stores while 69 percent research product features online and 68 percent price shop online. Combining these variables, 58 percent said they locate items online before going to a store to purchase. Only 13 percent said the Internet plays no part in their offline shopping.
The Kelsey Group’s research indicates that with purchases of more than US$500, where the Internet is the starting point, more than 90 percent of the transactions finish offline; comScore reports that 63 percent of search-related purchases happen offline; and the U.S. Census Bureau meanwhile reports that e-commerce represents only 2.5 percent of U.S. retail spending.
Many business models have developed with these findings in mind including NearbyNow, Yokel, ShopLocal, StepUp Commerce and Krillion. Each puts varying levels of product and inventory information online in a searchable fashion. ShopLocal deals with big-box retailers, Krillion with major appliances, NearbyNow with shopping center retailers, and StepUp with SMEs. Collectively, all of them mostly cover the gamut of retail segments.
Related to this is an interesting article from the May issue of SmartMoney Magazine, which tested a few of these product research and inventory search destinations. The results show the most accurate and useful search results from ShopLocal while Yokel and NearbyNow trail slightly behind.
From the article (link not available yet):
The Internet can help find the best price on almost any product, but what if you want to buy an item in person? A crop of new search engines lets shoppers search stores in their zip code for specific items in stock; some will compare prices, too. To see how well they work, we searched for a Sony Vaio laptop in San Jose, Calif., on four sites and called each store to compare our results.
One site, ShopLocal.com, got a perfect score: It gave us four nearby stores, all of which had the Vaio in stock (the best price: $849 at Best Buy). Yokel.com told us we’d find the Vaio in 12 local stores including Best Buy and Circuit City, but only seven of them actually had it. Two other sites were big misses: NearbyNow.com directed us to stores that had other Sony products. And at Slifter.com, we were given just one “local” result-a store in Chula Vista, Calif., a seven-hour drive away.
A NearbyNow rep says the site’s search is limited to 13 malls; a spokesperson for Slifter says the site works better when the search is broad. Bottom line: Local search sites are an okay first step, but it’s a good idea to call before heading out the door.
Tightening the Feedback Loop
The bit about calling first could be true, but calling the store can have its own set of pitfalls, such as busy (or lazy) store clerks, or human error in communicating how much something costs or how many are on the shelf.
We’re getting closer and closer to more reliable data served in easier to use formats by these and other companies that may eliminate the need for the store phone call. The holy grail here could be tighter integration with in-store accounting and inventory management (point-of-sale software) systems to create true real-time inventory data online.
StepUp is probably the furthest ahead of the game in terms of providing inventory data that it gets from small businesses. StepUp’s ability to reach a large and fragmented base of small businesses was a driving factor in Intuit’s acquisition of the company, Google’s partnership with the company and the melding of all three in the Google AdWords integration into QuickBooks.
Intuit’s stake in the point-of-sale software market positions StepUp to integrate reliable data with its online product and inventory search product. Generally, for StepUp and others, an improved feedback loop could enable better tracking of online lead to conversion for improved ROI assessment in the online-offline purchase funnel. Latency in this process, combined with the variety of online touch points that can influence a buying decision, can complicate this tracking challenge, however.
Improvement could come from better integration of trackable coupons and online product reservation/offline pickup — especially in the major appliance and consumer electronics categories. These categories combine high consideration products (lots of online research and price comparison) and the need to see, touch and feel the product (think flat screen TVs) and not have it shipped. ShopLocal and Krillion both have opportunities in these high consideration categories where they primarily hang their hats.
More important, tighter integration of online products with real-time data, will improve the user experience with better reliability, to effectively push forward even greater adoption of — and correlation between — online product research and offline buying.
Related: Speaking of ShopLocal, it is doing some interesting things with viral video, which VP of Business Development Bob Armour discussed during a video panel at TKG’s Drilling Down on Local conference. Peter Krasilovsky also explored this in a past blog post, and it will be discussed in an Interactive Local Media report on video (sub req.) due out next week.