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November 27, 2006

Online Search Drives Offline Purchases

posted by MR WAVETHEORY at 11/27/2006 12:56:00 AM
A recently released study by ROIResearch quantifies the impact online Search has on offline purchase behavior in traditional retail outlets. In this particular study, among general consumers, Search accounts for 49% of online purchases and 42% of retail purchases. A new study says that for every dollar spent online, searchers spend $2.56 offline.

Methodology

* Sampling distinct groups of customers and prospects who have made Search-influenced category purchases both online and off
* Collect offline purchase data related to online search activity, at a product and category level
* By probing the level of influence of Search in each product category, calibrate the dollar impact on an individual respondent level and extrapolate dollar amounts back out to the category at large
* Taken together, these metrics can connect offline behavior with online search activity, and calculate a potential dollar influence Search can have on each category.
* Historical purchase data appended from customer transaction database gave additional insight into self-reported versus actual purchase data collected in the survey to extrapolate results to the customer universe at large.

Findings

* In category studied, for every $1 dollar spent online the average search-user spends $2.56 offline. The Search has the ability to influence an incremental 3 times the dollar value of e-commerce transactions by reaching consumers who shop in traditional channels. The factor was even higher for existing client customers, says the report, with a ratio of 3.37x spent offline vs. online.
* In the study, those who search up to 10 times annually spend an average of $1,789 online while those who searched 31+ times spent an average of $2,943 online. Similarly in off-line transactions, those who search 10 or fewer times spend an average of $2,219 through retail locations, while those who search 31+ times spend an average of $3,839.
* Search influences 20-30% of purchases made at retail locations, concludes the report.

By indexing the influence on purchase of Search, the survey quantifies the amount of money spent as a result of Search. For the client's Online Purchasers, 48% of money spent online and 34% of money spent at retail locations can be attributed to Search. Among general consumers, Search accounts for 49% of online purchases and 42% of retail purchases.

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