Where Online Ordering of Local Products and Services Is Headed

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Last week YP announced a deal with Goodzer to integrate the latter company’s “hyperlocal product and service data, including descriptions, availability, and pricing” into YP’s local listings. The goal of the integration project, in the words of Goodzer CEO Mike Wilson, is to “make it easier for consumers to engage with local businesses.” It’s worth unpacking that statement a bit, because I think it contains some interesting assumptions about the current state of local and a hint as to future prospects.

Traditionally, we track consumer engagement with local listings by straightforward metrics: clicks to the business website, phone calls, appointments set, reservations made, foot traffic to the business location. Most of these metrics, however, have notable drawbacks when it comes to proving a definitive link between listings and revenue. First, the listing itself may enable a phone call or a visit to the store, but most consumer actions take place outside the listing itself, on the phone or in the store. Second, most engagement metrics do not guarantee that a transaction will occur, but merely represent some level of intent. Note the reliance in many recent studies on self-reported statistics from consumers regarding the likelihood that a local search will result in an offline purchase.

The YP announcement seems designed to improve upon, but not overhaul, the traditional model. As with similar hyperlocal data aggregators such as Locu and SinglePlatform, Goodzer’s specialty in granular data helps increase the value of business listings by providing the types of specific offering data consumers may need in order to find a desired product or choose among competitors.

But granular data in business listings is not exactly innovative in itself. Superpages for years has been providing highly detailed information on brands carried, products, services, certifications, and the like. Much of that data was gathered from third party sources and not direct from the business, a strategy that can be counterproductive if consumers perceive it as non-authoritative or generated by content farming. Moreover, presenting mere information about a business, no matter how rich and detailed, can do no more than bring the consumer to the threshold of a transaction.

Forays into the online reservations space, on the part of Yelp, Google, TripAdvisor, OpenTable, and others, gesture toward the potential for closing the transaction loop within the local listing itself. A reservation is not the same as a purchase, but it represents the most definite commitment to purchase that is possible online in the case of restaurants, spas, salons, and similar service providers – unless we are talking about things like pizza delivery, in which case the entire transaction could take place within the business listing as it does today in a more fragmented way across chain store websites and online-to-offline delivery services.

In the case of retailers, the completion of an actual purchase within the business listing is theoretically possible as well. As with restaurant delivery, local purchases are conducted online today in a fragmented manner, for instance by means of delivery-to-store services provided by Walmart and Best Buy. The ubiquity of mobile payments providers like Square (in my town mobile payments have moved solidly into traditional brick and mortal retail) adds a simple but effective online layer to local commerce, while moves such as this week’s announcement of Apple Pay suggest that mobile payments may become increasingly integrated with complementary local apps and services.

Twitter too is moving into local commerce, adding an experimental “buy” button to tweets from musicians and retailers so that consumers can purchase band T-shirts, event tickets, and products from stores like Burberry and Home Depot.

Whereas Twitter’s experiment is better suited to the context of time-sensitive promotions, local search by its nature originates with the consumer and consists of actively searching for exactly the products or services one requires. Any local search site that sets its sights on powering transactions will need to take into account the broad range of consumer needs in the local space. But some products are likely much better suited to online purchasing than others. You might, for instance, be happy to choose your weekly purchases from a grocery or big box store with a few clicks, knowing they will be ready and waiting for you to pick up and eliminating the need to be your own gofer.

Damian Rollison is Director of Market Insights at SOCi.