Using Local Search to Fight Inflation
The trend of climbing prices for gas, groceries, real estate, and just about every other product has caused noticeable shifts in US consumer behavior. Just as the pandemic increased our reliance on digital information and services, so too is inflation reflected in the volume of activities on digital platforms, such as searches for certain types of local business. The searches we conduct online are a barometer of our larger concerns, and these days, belt tightening is clearly on the minds of many consumers.
Perhaps the longest-running trend during this period of economic downturn has been rising gas prices. Using GasBuddy’s convenient national average price charts, we can see that gas prices have been rising steadily, with minimal fluctuation, for the past 18 months, from a low of $2.29 in January 2021 to a peak of $5.02 in June.
The trend of rising gas prices is mirrored by a growing volume of Google searches for terms related to the category “gas & convenience,” as shown below. (The data comes from Google Business Profile locations under management at SOCi.)
The chart shows that all three types of search tracked within Google Business Profile Insights have increased along with gas prices. These include Direct Searches, where the user searched for a specific business by name (“Chevron station in Albuquerque”); Branded Searches, where the user searched for a general brand name (“Chevron” or “Mobil”); and Discovery Searches, where the user searched for a generic class of businesses (“gas stations near me”).
All search types went up in volume during the year-and-a-half climb in gas prices, but the rise in general keyword searches is the most dramatic, representing about a 102% increase from January 2021 to May 2022.
Why would consumers turn to general searches in greater numbers as prices climb higher and higher? Because search offers alternatives to the places we usually frequent for our everyday needs and provides information that helps us make more informed purchase decisions.
This is particularly true in a vertical like gas stations, where Google offers price information directly in the Local Pack, allowing consumers to compare prices at different gas stations before deciding where to go. This feature has been around for a while, but presumably consumers find it especially useful these days, when a $0.20 or $0.40 price difference per gallon might help you avoid topping $100 for a fill-up.
Food prices have increased along a similar trajectory, beginning about a year ago, with inflation reaching a high of 10.1% in May, the biggest increase since 1981. As with gas prices, the rising cost of food has been accompanied by an increased number of Google searches for terms like “grocery store near me,” beginning around August 2021 and continuing through May.
Notably, the Direct Search trend is more dramatic for grocery stores than for gas stations. Whereas Discovery Searches for grocery stores are up about 24% from last August, Direct Searches are up 146%. One likely explanation is that consumers have stronger brand affiliation with grocery stores than with gas stations, making them more likely to seek out specific brands when researching lower cost alternatives to their favorite stores. A diehard Whole Foods customer, for example, might be drawn to try Trader Joe’s over Aldi or Vons, and might be inclined to seek out that brand by name when searching for grocery deals.
Google search trends for grocery mirror the results of a recent report from Apptopia, which found that grocery app usage was up 77% in May compared to the same period last year. The report finds that consumers are turning to grocery store apps in an effort to find discounts and coupons — and that, on the whole, the experience has been frustrating, with at least half of the top ten apps getting negative scores for both price and coupon availability.
Depending on the vertical, consumers might be most interested in the lowest possible price among available alternatives — more likely for highly commodified verticals like gas — or they might be willing to switch brands as long as the alternative is reasonably similar to their preferred brand. Grocery stores are arguably more commodified than many other verticals, such as clothing, cars, or electronics, which suggests that many brands should have an opportunity to win new customers during this period, as long as they are able to offer good quality at reasonable prices. Search signals indicate that customers are actively seeking such alternatives.