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Research just released from Hitwise and WebCollage shows that shoppers are more likely to shop in stores and visit Web sites of retailers that provide comprehensive product information, including inventory data. This is a growing trend in the local search space being addressed by the likes of StepUp Commerce, ShopLocal, NearbyNow and Krillion. This also ties to data from The Kelsey Group’s Internet Yellow Pages and Local Search Forecast that predict more investment in search engine optimization, including the deepening of content by local search engines and shopping engines alike.


Hitwise’s study shows that retail sites get 25 percent of their traffic from search engines. A related data point from WebCollage’s 2007 Survey of Online Consumer Product Research Habits meanwhile shows that the more online information retailers provide, the more likely they will see both foot traffic and Web traffic (high-level data points from both studies at InformationWeek).

To the first point, this is very much the same story with shopping engines that more or less all receive the same retail feeds, resulting in similar experiences and little brand affinity or differentiation. This has caused them to go out and buy most of their traffic from the likes of Google AdWords. Some shopping engines like Pronto meanwhile attempt to differentiate themselves with more comprehensive search involving better crawling technologies.

But this SEM spend to drive traffic to both retail sites and shopping engines should change if the second point is accurate. Put this together with findings from The Kelsey Group’s Local Search Forecast, and it paints a picture of retail search sites moving away from paid search and toward investments in better SEO tactics to beef up their content.

This would allow for the consumer attraction to comprehensive data, as well as search engine crawler attraction to that data (basic SEO). One company that sticks out with this strategy is Krillion, which has planted search engine lightning rods throughout the Web with millions of individual product search landing pages, each with deep product information. Since the company’s February launch we haven’t checked back in to see how this strategy has worked so far (might be too early to judge), but I am eager to find out.

The Kelsey Group forecast comes into the picture in its local search market expectation. The data show expected growth in the global interactive directory market (local search and IYP) to be 22.3 percent (CAGR) from US$4.1 billion to US$11.1 billion. The U.S figure is meanwhile expected to grow 26.1 percent (CAGR) to US$4.9 billion.

These high growth rates will be partly due to increased investment levels in SEO, driven by increasing SEM prices and resulting margin compression. As this happens in conjunction with more considered SEO strategies by retailers and retail search sites, such investments will begin to look more attractive as an alternative to paid search.

Krillion’s efforts, Citysearch’s recent acquisition of Insider Pages and Google’s enhancements to Local Business Center (among others) are driven by the goal to beef up their content and are early evidence of this trend. If the triangulation of these data points is accurate, expect such efforts to continue.


Related: Hitwise also interestingly points out that social networking sites are driving a growing percentage of upstream visits to shopping and classified Web sites. But that’s a whole different post. Read more from InformationWeek.

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