Does Local Search Equal A Trillion Dollars?

How many times have you gone to Best Buy to buy a new camera/TV/computer/printer and were carrying a bunch of printouts of product reviews you got from researching online first?

More and more of us are now researching purchases “online” and then buying “offline” in our respective local communities. In fact, Yahoo just released a study that confirms this behavior, and even more specifically outlines how online advertising affects offline purchase behavior.

Greg Sterling, interestingly enough, calls this behavior “Local Search” by way of his definition:

“Local search is a process where users conduct research online but with the ultimate intention or result being an offline transaction. It’s about the Internet influencing real-world buying decisions.”

In my mind, this means that “local search” really means “local buying” due to the fact that these two actions are merely steps in the traditional commerce process. In other words, you aren’t going to search for a service or product outside of your geographical vicinity if you intend to buy it offline.

Here’s the other part of Greg’s post that got my attention:

The phrase, The Trillion Dollar Marketplace, comes from recent Jupiter and Forrester e-commerce/retail reports that predict the Internet will be influencing a trillion dollars of offline (local) spending by either 2010 or 2011.

Personally, I think this estimate is a bit overly optimistic (1999 flashback, anyone?), but the point is that we spend most of our buying dollars in the physical community in which we live. You can’t buy food out of state and have it shipped (I guess you could, but it wouldn’t be hot). Most of us still like to try our clothes on before purchasing, and there’s no denying the joy of instant gratification (or less hassle of returns) of picking up that shiny new gadget toy from your local electronics store today (rather than in 7-10 business days). And if I want any type of service or repair for my house or car, guess what, it’s going to be local.

More and more, it’s becoming important for online buying guides to provide very relevant and very accurate local retail guides. Innovations like alerts to local sales and special offers or service referrals from your in-town friends and family are going to become imperative for the bricks and mortar lot to compete for those dollars that are not spent in the online channel.

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