Online Shoppers Convert Offline? What a Surprise

A new piece of research from iProspect, carried out by Jupiter says the following:

Sixty-two percent of Internet users who researched products online during the holiday season used a search engine to do so, and nearly half (47 percent) of researchers ended up buying offline.

The ClickZ article goes on to talk about the need to track these results. Of course. And offline tracking (especially given latency that often exists in these situations) is challenging. There are codes, offers and call tracking, etc. But it’s a fundamental issue.

Here at SES many of the search marketer attendees appear relatively "clueless" (to use the vernacular) about the bigger picture of search engine user behavior. They myopically see only SEM and online "conversions" or leads. But the real story is much bigger and more complex.

The iProspect study hints at that larger picture. But we’ve been arguing for more than two years that the model "going forward" is search/shop online buy offline. E-commerce will continue to grow but it will NEVER be more than a fraction of traditional spending in the local market. Get it: NEVER.

Right now at $90 billion, it’s only 2.5% of total U.S. retail (that’s right). But search and the Internet more generally will influence more and more of that offline buying. So the influence of search is growing much faster than e-commerce revenues. All this creates real complexity for everyone. Measuring search efficacy and calculating ROI becomes more challenging when you widen the lens on all this.

The iProspect study says what it says, but it probably isn’t truly representative of the ratio of online and offline buying. Of course all this is going to vary by "consideration level" and category: commodities are much easier to buy online than higher consideration items.

The buying cycle is getting "uglier," more complex and is not at all linear. (This was my presentation at last year’s Drilling Down event). But search and the Internet are becoming a larger part of that convoluted process.

The bottom line is that marketers and search engines need to understand much more clearly how consumers are engaging with search and what their patterns are so they can respond appropriately.

Yahoo! gets this and is doing the best job among the majors of trying to educate the marketplace and marketers about the bigger picture of the buying cycle.