To stay relevant, large national brands will need to recognize the power of the "local Internet." They'll need to adopt brand localization tactics on their Web sites and completely revamp their search engine-marketing strategies to meet consumers' growing demand for locally relevant content on the Web.
Craigslist.com was a localization pioneer on the Internet. On its site, the place trumps the thing. With its millions of daily visitors, the site's popularity shows that we still organize our lives around where we live, and not what we want. Validation of the concept came from eBay-the ultimate thing-based community. EBay acquired a 25% stake Craigslist in 2004.
But big national brands are still pretending that the "local Internet" doesn't exist. They're still stuck in the 20th century mentality of monolithic, global brand consistency. They're clinging to the belief that their Web sites don't have to recognize regional differences in attitudes and preferences. And after spending billions of dollars on supply-chain management systems that deliver product sameness with lightning speed, the thought of pushing different products in different parts of the country makes them absolutely squeamish.
But this dogma is increasingly at odds with marketplace reality. A 2005 study conducted by researchers from UCLA and the University of Chicago, titled "Consumer Package Goods in the United States: National Brands, Local Branding," found that "for a typical national brand, the geographic variation in market shares, perceived quality levels and local dominance is so large that it places in question the concept and relevance of a 'national brand."'
If the marketplace dynamics of individual product brands vary so greatly by geography, then the retailers that sell them must also experience the same variations. But try finding these dynamics reflected on a retailer's Web site.
The ultimate spot advertising play
A decade ago, tailoring specific messages and product offers to local markets would have been prohibitively expensive. Creating these messages, buying local media and producing individual ads would have blown the budget. But Internet technology makes these tasks relatively easy and inexpensive. In the same way that marketers already use rules-based personalization tools to offer product X to consumers who have just purchased product Y, they can also use a similar rules-based system to target messages, products and content to consumers in a certain place at a certain time, on their Web site.
But most don't.
During the winter, for example, a customer in Boston visiting the Home Depot Web site has the same experience as a customer in Phoenix, despite the fact that the home improvement agendas of each consumer are likely to be quite different. While each customer can use the online Store Finder to locate the closest store, the content on that store's page includes just a map, an address and a telephone number. Wouldn't it be nice if, when clicking on the suburban Boston store, the customer was greeted with a promotion on snow blowers, or a sale on interior paint? Wouldn't it be nice for the Phoenix customer to see patio furniture? Wouldn't it be interesting if either customer saw pictures of the store staff, or a listing of job opportunities at that specific store? And what if she saw the local community organizations supported by that store's community involvement?
Home Depot is not alone in the lack of localness on its Web site. The local experience on the Lowe's site isn't much better. Nor is it better on the Web sites of Sears or Nordstrom, Kroger or Albertsons, Barnes & Noble or Borders, Williams-Sonoma or Crate & Barrel-all retailers who would experience significant differences in local preferences and competition.
A few national retailers embrace localization. On the Bass Pro Shop Web site, for example, each of the individual store pages feature the photograph of a friendly-looking store manager and his e-mail address, a photo tour of the individual store, a listing of in-store events and, fittingly, the store's Gross Ratings Point-the points that advertisers buy on a national basis, based on the rating points that national shows achieve-coordinates.
And a growing number of strong regional or local retailers are already providing a local Web site experience. For example, the Web site of Downeast Energy & Building Supply, based north of Portland, Maine, features local photography, a brief on how they participate in the community, a link to local associations to which they belong, and photographs of their kitchen and bath designers.
Falling down on local search
National retailers are also failing miserably in providing consumers with a relevant online local search experience. Industry prognosticators report that anywhere from 25% to 40% of the 5 billion monthly search engine queries are local in intent: A 2004 study by The Kelsey Group and BizRate.com, based on 5,000 online buyers, found that 25% of commercial searches were local. Another Kelsey study in December 2003 found that 60% of all searches were local in nature. And a March 2006 study by eMarketer found that "the growth of local search will outstrip national search in every year from 2005 through 2010."
Of course, Google and Yahoo pay attention to large numbers. Each is competing to develop local search results that provide relevant local information, including maps and consumer reviews of local businesses. For example, Google late last month launched a paid service that lets local advertisers place display ads for their businesses within the map that appears along with local search results. Search-engine upstarts such as Metrobot, which arrays merchants on street-level pedestrian-friendly maps, and TrueLocal, which winnows search results to actual bricks-and-mortar stores, are delivering on the consumer's desire to have a local Internet experience.
While most national retailers use search engine optimization techniques to make their Web sites pop up when a consumer types in their store name and a city, or a product category and a city, the payoff to the consumer is anything but "local." The consumer ends up at the retailer's main home page, where she must then search again for her desired product and then navigate to the store locator feature, which merely provides a map and telephone number.
Some technology companies are developing solutions that allow retailers to create more relevant local search results. For example, ShopLocal, Local Thunder and ReachLocal have each developed unique platforms-with different emphases-that allow retailers to create relevant content to respond to local search queries. The Local Thunder platform also features a technology that builds local-content landing pages that operate off the retailer's Store Locator feature and local search-engine queries.
Agencies, too, must get more creative in thinking about their client's own Web site as spot advertising vehicle-one far more efficient than offline local media.
The technology exists for national retailers to become locally relevant on the Internet. But if brands cling to the old notion that consumers are "national" instead of "local," and that local preferences and competition don't matter as much as national GRPs and main Web site hits, they will become irrelevant on the local Internet. They will lose customers and prospects to the national brands that are delivering a local experience on the Web, as well as, of course, those local independent stores that have already crafted a compelling local Web experience for their customers.