When StepUp launched a couple of years ago with the intention of delivering real-time inventory information and product availability to the Internet it was met with considerable skepticism, along the lines of “yeah, how are they gonna do that?” and “good luck.”
As we’ve pointed out before, e-commerce (though impressive and growing) is only 2.5 percent of all US retail spending according to the US Commerce Dept. (Forrester has a somewhat larger number). It doesn’t matter however whether the actual number is what the US says it is or Forrester’s larger projection. Even in the most “optimistic” scenario, online shopping is no more than 5 percent of total retail spending.
Yet our data show that 70 percent of local consumers (which is everybody ultimately) are using the Internet to find products and services locally. That doesn’t mean they’re not using other traditional media. However, it does mean they’re online doing research and price comparisons — and then spend their money in a physical store (whether it’s a mom and pop or a Best Buy).
So what does this mean? It means that consumers are generally not finding information about where they can buy products locally online or they’re having great difficulty in doing so.
Google’s decision to be “agnostic” about whether consumers buy something online or locally is smart, given consumer interests and behavior, and I would expect other shopping engines to follow suit this year.
If they don’t they may put themselves at a competitive disadvantage and potentially leave money on the table. E-commerce isn’t going to take over the world as everyone once thought; it’s just one channel.
The far larger channel — but increasingly influenced by the Internet — is offline/local shopping.