US internet marketing firm Internet-Engine
has carried out an analysis of the search results from Google, Yahoo and MSN Live over the past three years over the holiday season and has found that internet retailers have a very strong presence, representing well over 30% of the listings shown, whilst bricks and mortar retailers consistently have had the weakest presence of any group showing up only 12% of the time.
"Online retailers have developed and maintained a dominant presence in search marketing," says Thom Disch, Internet-Engine's CEO and the director of the The Retail Search Presence Study. "To put this in perspective, when a shopper does a search on the Internet, he or she will find three listings from online retailers for every one listing from a traditional retailer."
Steven Rogers, Professor of Entrepreneurship at Northwestern University’s Kellogg School of Management adds that "This is a classic example of how the more nimble entrepreneurs will use new technology and innovation to replace old school marketers. Traditional retailers are relying on brand awareness to drive their internet marketing programs, while these start-up on-line retailers are reaching consumers in new and creative ways. The end result: Entrepreneurially oriented organizations, like Amazon, increase market share and show record profits while the traditional brick and mortar retailers are reporting sales declines and profit shortfalls."
While traditional retailers have increased their search presence slightly over the past three years, they still remain behind every other group including manufacturers who usually do not sell directly to the consumer. "The manufacturers are looking at the big picture by establishing their web presence and using the internet and search marketing to get in front of the consumer when the shopper is in the decision making process," Thom Disch explains.
The study also compared paid and free search results, finding that the free or organic listings of the traditional retailer websites have only a 2% share of the total listings. This is dramatically smaller than the share for free listings for eCommerce sites at 17%, shopping comparison sites at 11% and manufacturers' websites at 10%.
"Not appearing in the free listings means that the brick & mortar retailers must spend more of their money on paid search listings which ultimately will have a negative impact on their overall profitability," said Disch. "Investing in search optimization techniques to increase the organic or free listings would help these traditional retailers by balancing their listing placements, reducing their overall costs and increasing their market presence."
"Traditional retailers may not be keeping up with changes in consumer behaviour since they are relying on a brand-push marketing strategy while the online retailers using search marketing present a consumer-pull strategy, meaning the product is presented to the consumer by the search engines when the consumer is looking for information about that specific product, when they are ready to buy," Disch concluded.