Gauging the Opportunity to Replace Local Merchants’ Websites

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Half of local merchants Street Fight surveyed are open to replacing important features of their websites with third-party sites and listings. Facebook and Google are their favorite options. While local small business sites won’t go away completely, providers of local technologies and marketing services need to help businesses implement complementary strategies.

Regular Street Fight contributors David Mihm and Mike Blumenthal have been talking about small and medium businesses using Google My Business and Maps as a homepage replacement for some time. But lately, they’ve escalated the conversation to treating Google not just as an entry point, but as the entire business website. They argue that the addition of features to Google’s Knowledge Panel, along with robust support of posts, shopping integration, and video, help make the case.

At the same time, Facebook finally appears to be getting serious about local business features, if not solving its local search problems. Beefed-up local page features like messaging, maps (from Here), click-to-call, and email capture add to its critical role in reviews. Facebook is also building out its Marketplace features, recently focusing on home services. It has a growing collection of integrations with suppliers like Shopify, MailChimp, Handy, HomeAdvisor, and Edmunds.

Remember when it was conventional wisdom that half of local SMBs didn’t have a website? That doesn’t seem so long ago, but nowadays the great majority (80%) do have sites. But Street Fight’s latest annual Local Merchants Survey (300 U.S. small businesses with physical locations and fewer than 50 employees) uncovered a potential for replacement. We asked respondents what they used their sites for, and, considering the functions they deemed most important, whether they could replace them with a list of suggested companies and platforms. Just under half (48%) said, “I couldn’t replace them.” The figure below illustrates the potential replacements cited by the others. Facebook’s company pages and Google’s enriched listings topped the list, with offerings from companies like Yelp, LinkedIn, Amazon, and eBay not far behind.

The local merchants open to replacements represented a similar mix of vertical industries to the other respondents and, intriguingly, were not the smallest businesses. In fact, they tended to be a little larger in terms of number of employees and locations than the respondents who said they couldn’t replace those features. Similarly, the would-be replacers appeared to be more sophisticated in how they used and managed digital and traditional marketing tactics than the others.

There was a significant overlap among Facebook and Google fans. Of the respondents that tabbed Facebook, 40% also noted Google, and half of the Google group also listed Facebook. As I wrote earlier, Facebook’s negative association with issues like customer information leaks, fake news, and Russian political meddling hasn’t destroyed its marketing utility for most local merchants. About one in five of the group of potential replacers who used Facebook for marketing said they would be re-examining their use (15%) or cutting Facebook out (4%). Those who named Google were more negative than those who named Facebook.

The figure above illustrates what features could potentially be replaced. The functions the replacers use their sites for didn’t vary dramatically from the “couldn’t replace” crowd. Most local merchants are still using their websites for information discovery, rather than for transacting business or customer service. It may end up the case that Google, Facebook, and Yelp can address those functions well enough for them, even as they start to do more business online.

But besides those who don’t see third parties as an adequate replacement, there are good reasons for SMBs to maintain their own sites even if they shift important functions elsewhere. A Local Search Association 2017 consumer survey illustrated that an SMB’s site was the second most helpful local media site after search engines. And in a report commissioned by SMB website builder Mono, the LSA lays out the case for SMBs to use their sites as an information hub: It’s actually owned and controlled by the business and is thus less dependent on the whims of Facebook or Google. Local sites should be optimized to supply data to search and other sources, while remaining the core point for customer feedback.

Meanwhile, Street Fight used its survey to look at characteristics of the potential replacers that should help providers work with them to build complementary marketing programs. They’re good target customers—more of them (45%) than the others (24%) said they’d be increasing their overall marketing budgets, and that they were increasing the digital portion of their spending. Some other characteristics to note:

  • They listed a shortage of expertise as their biggest digital marketing challenge, similar to the others, but they rated proving that digital marketing drove customers to their local store and a lack of time as tied for the second most significant challenge. 
  • The potential replacers were more likely to list their site as the area where they needed the most help, but like the others, they also rated SEO high on the list. But there wasn’t really a single, dominant area of need—similar numbers of local merchants called out social media marketing, paid search, and mobile as well.
  • Over half listed acquiring new customers as their top marketing objective, a little less than the others. More of the replacers also had generating sales and raising brand awareness in their top 2 list.
  • Similar to other local merchants, they rated social media and email as their most effective marketing tactics. They were more likely to cite Google My Business listings, paid search, and TV in their top 3. 
  • Mobile wallets and payments was the new technology they were most interested in exploring, and one in five were interested in real-time customer location data. They also cited streaming, podcasting, and mobile push offerings as areas of interest.
  • They showed an above-average interest in integrating marketing and advertising with back-office functions.

Based on the survey, companies selling to these businesses should emphasize customer references and peer referrals. They rated demonstrations and documentation as slightly more useful than product/service ratings and reviews, whether they were from independent sources or the vendor. These prospects are more likely to work with multiple suppliers already, and they don’t seem to rate one-stop shopping as any more important than the ability to pick a best-of-breed solution.

David Card is Street Fight’s director of research.

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