Internet Trends Internationally

Shopping on line; researching offline. Researching online; shopping offline

Any seller not having a website will lose out badly as time progresses and I describe below how and why it will happen in fact this process has already started and is now picking up speed. Just at the weekend (May 2005) it was reported by Sky TV news in the UK that high street retail sales were down across a broad spectrum yet retail sales in total were up thanks to online purchases. However it gets even more serious than this as far as the average retailer is concerned.

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CHRISTMAS SALES IN THE USA ONLINE

Take a look at this forecast below:

Online Sales Forecast 2000s

When the shopping was done and sanity returned in January 2005 the online sales had in fact exceeded 30% yet again. Now of course this growth is of a reasonably low base but the fact remains that online sales are surging ahead at the cost of shopping mall sales.

A research company called www.digitalcenter.org has published for the last 4 years trends concerning the behavior of USA shoppers both online and off-line. Their findings are either exciting or worrying depending whether youre a believer in the web or a stuck-in-the-past retailer. This report is free and I suggest you take a look at it.

One of the major conclusions is that large chunks of the online community are using the commercial Internet in 2 major ways:

  • They are doing research online and making a product decision as to where to buy it off-line. In other words price comparisons, product specifications are being confirmed on the web and the shopper then goes off to the real world store to buy. It is obvious that if any store is not found in this kind of research the chances are high that that store will not make the sale to this Internet-savvy customer.
  • Consumers are doing research off-line and then coming home and buying online at the best price/service offer using shopping channels like Googles online shopping comparison channel Froogle http://froogle.Google.com/ The image below shows that you can armchair shop for the best price for virtually anything in the simplest possible way. Froogle searches all online stores for the product wanted and returns results from every store with the corresponding price. I bought myself a digital camera in 2004 using just this method and saved $500 (about 50%) on what I would have paid in South Africa.

Froogle Google Products

Froogle and other shopping comparison websites allow you to find lowest price for virtually anything quickly and easily not yet available in South Africa (but it will be then watch retailers wake up). This image shows availability of Canon Powershot A95. prices range from $239 to $356 . I think the retailer trying to sell at $356 has a problem.

This article is not written to convince anybody that the Internet is powerful, and the retail channel of choice for growing numbers of shoppers. I have written these few words to highlight that not having a website that gets found will result in two types of market share loss for any company

Local search … and why the yellow pages will get thinner not thicker

The local search medium of choice for many years has been the Yellow pages. This medium has been a license to print vast amounts of money for a long time and now it is under great threat from search engines.

The Yellow Pages is a non-interactive, static communications medium. The biggest and most colorful ad will probably get the most phone calls just because they are bigger not because they have the best prices, or best service. In fact it is almost impossible to use the Yellow pages to make any kind of objective conclusion about the company advertised.

What’s wrong with yellow pages? … What’s right with a working website?

In my 13 years in my own business I have never used Yellow Pages advertising much.

As a user (not advertiser) it always seemed to me to be such a hassle and more often than not I was overwhelmed in most cases by the number of adverts that appeared in each section. I thus assumed rightly or wrongly that most other people must have come to the same conclusion as I had so why should I spend money on this type of medium . just to get lost with no way to truly differentiate myself or my company.

What also always struck me as the biggest and most obvious problem associated with this form of advertising was the lack of information I do not mean telephone number or fax number. I mean down-to-earth information to help me make the right decision it was non-existent. I still had to make numerous telephone calls and then make an assessment based upon that call and frankly I had no idea whether I had made a good or bad choice.

How did I choose? more often than not on the size of the advert. Presumably the bigger organizations knew this which meant the little guy would get found less often.

So what is wrong with the Yellow Pages? well I actually rang to find out the costs of advertising in this medium. After 4 calls, being cut off twice and having had no luck rousing anyone in sales I was about to give up when I finally managed to reach a man who was in the print room but promised to get the information and ring me back.

He did ring me back and to say I was staggered by the cost is a true understatement.

I asked for a 4 color 1/8th of a page advert on a white background (to stick out) in the Johannesburg, East Rand and West Rand directories. Heres the quote below (October 30th, 2003). I thought not too bad until he told me this was per month NOT per year.

Yellow Pages Listing Vs Local Search

Same size black on yellow was about 35% cheaper.

I thought thats almost R60,000 per year to get lost in thousands of pages. Of course once you are in it is impossible to modify an ad. Then I thought some more and mentally compared with what could be achieved on the web with 10% of that annual expenditure and concluded the following:

  • On the web I am not limited to a small box, impossible to change except once per year.
  • I can use color, layout, space, images, testimonials and even sound easily at tiny cost to appeal to thousands and thousands of pre-qualified visitors and offer as much valuable information as anyone could ever need including price, downloadable catalogues, FAQs and whatever else you can imagine.
  • On the web I can make a special offer just for a week, a month even a weekend if I want to.
  • I get the total attention of the visitor to my site no clutter from other ads.
    The visitor can bookmark me for a later visit, easily without lugging a heavy book around and finding the relevant page again.
  • My site can be found under as many categories as I wish not a single category.
  • On a web I can offer to keep contact with a newsletter and therefore get a potential lifetime customer.
    I have only myself to blame on the web if I am not better than any of my competitors. On the Yellow Pages I remain just one of many … I have virtually no control and God forbid if my telephone number changes during the year, or it is incorrectly printed.
  • The web allows me to establish myself and my business as an expert in the field. It allows me to interact with my visitors.
  • Maybe the most important difference I am exposed to a global audience not just those with a landline in Gauteng.
  • All this for a maximum of R500 per month, cant be bad.
  • I don’t think I will be changing my view on Yellow Pages . But tell me why do so many companies spend these exorbitant amounts of money on such a poorly performing medium when all they need is a website. The answer in my opinion is that the vast majority of advertisers don’t know how easy and effective a website can be.

If you keep an eye on internet developments, like I do, you will have taken note of what is happening in the US, Australia and elsewhere. The one business sector that is guaranteed to lose out to the internet is Yellow Pages . not tomorrow, not even next year but as more and more people become internet connected, net-savvy and learn how to use search engines it is inevitable.

Google and Yahoo and probably MSN have specifically targeted local search as a means or wresting control of this massive d medium away from Yellow Pages.

Thats why its inevitable that the Yellow Pages will get thinner its called progress.

Google has also developed a localized search capability that allows people to search only in specific geographical areas e.g. Manhattan 42nd street only.

Heres an example I wanted to find a place that sold Pizzas in Plymouth (UK) and choose from a list. This is what Google presented me with a great choice, websites to click on and a map showing all locations in Plymouth. They all provide directions to your chosen outlet by the way. Thats magic…

Google Local Search Pizza

How can Yellow Pages ever hope to compete with this awesome search and display power?

Of course Itll be a while before we see this in South Africa but … just watch for the newcomers to take on Telkom. This is an area where newcomers will hit Telkom hard using modern technology and systems like those of Google and Yahoo and others.

Death of directories and why they are doomed

When did you last use a directory a better question when did you last deliberately use a directory and find what you wanted? If youre like me it was a long time ago.

The simplicity of a search using a targeted keyphrase is so quick and simple and for the right kind of phrase very accurate. Given this situation why would anybody want to use a directory?

Advertising revolution and the terrible waste of advertising spend

Ordinary people are sick and tired of interruption advertising. For this reason the web is a major marketing revolution.

Consumers are looking for trusting relationships, value for money and WIIFM (whats in it for me). Contextual advertising on the internet goes a long way to providing WIIFM and it represents superb value for money and immediate ROI information for all marketers interested in anything other than so-called brand protection.

Only the internet can deliver highly targeted (i.e. contextual) messages instantly to those looking for such messages and information. An in-depth knowledge of how Internet marketing really works is the secret to success here and SEO and SEM (search engine marketing which normally refers to Pay Per Click search engine campaigns) are vital success components. Advertising agencies do not have SEO and SEM knowledge in general. Frankly most still need to actually acknowledge the presence of the Internet. Most have not reached the lets embrace the Internet stage yet.

Everybody who is anybody in the advertising world will tell you … it is tough to get any brand noticed in traditional marketplaces these days. Consumers are over-burdened with “brand” messages and starved of true contextual (benefit type, targeted messages providing value to the consumer and not the advertiser)

It is reckoned that the average consumer is bombarded by at least 200 different brand messages daily … and these messages are received at the most inconvenient time too, for example when you are watching your favorite TV program. This is what is meant by interruption advertising.

Modern marketing is all about what you and I want to hear (WIIFM … what’s in it for me?) when we want to hear it and certainly not what others want to tell us when we dont want to hear it.

Modern marketing is all about value for money, person to person communication. Marketers must know ROI for ad campaigns and this is almost impossible to get in traditional media and when it is discovered with any degree of accuracy or usefulness it is months later and vast amounts of money have been spent.

Brands are not top of the mind anymore except in the eyes and minds of advertising agents. Product benefits and value for money along with ease of purchase and rapid response service are top of the mind for rapidly growing armies of consumers.

Traditional advertising is extremely expensive and if you want to try to build a brand it is even more so. It is simply not possible for mere mortals with limited time and money to succeed using traditional expensive advertising approaches.

Trust is what it is about and nothing beats the internet for building trust with total strangers separated by continents.

Read more on Internet Trends and contextual advertising here.

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