Search marketing firm Internet Engine released findings from a new “Retail Search Presence Study,” which analyzed paid search results in ten product categories over the past three holiday shopping seasons. What the study found was the following:

The results show that on-line retailers have a very strong presence, representing well over 30% of the listings shown, while bricks and mortar retailers consistently have had the weakest presence of any group showing up only 12% of the time.

The overwhelming majority of product purchases are made in stores. E-commerce remains a tiny fraction (<4%) of US retail. However, each year more offline/local consumer purchase behavior is being influenced by the internet, as consumers use search and other online resources to get information about products:

Source: Krillion-eTailing Group (2008), n=1,000

In early 2008, research firm Nielsen asked, “If you were only able to use one source of information to support your next consumer electronics purchase, which would you choose?” Here’s how respondents answered:

• Internet – 58%
• Visit to local stores – 25%
• Reviews in newspapers/magazines – 8%
• Friends and family – 8%
• Other – 1%

Despite the influence of the internet and search in particular on in-store sales, traditional retailers are doing a relatively poor job of SEM and SEO according to the “Retail Search Presence Study”:

Search and online marketing are in the DNA of a company like Amazon in a way that they’re not for a traditional retailer. However, ShopLocal is trying to change that with a new product that takes retailer content (i.e., deals and offers that otherwise appears in newspaper “circular” ads) and makes it dynamically available for SEM. It’s a pretty compelling offering that should improve the relative visibility and ad response for traditional retailers in search.

I’ve written up the program in more detail on my personal blog Screenwerk.

Regardless of the approach they take, US retailers need to do a better job with both SEM and SEO but in particular — showing consumers locally where they can buy the products and services they’re researching online. (Mobile is another area of opportunity for traditional retailers, but that’s another conversation.)

Related Topics: Search Ads: General | Search Marketing: General | Search Marketing: Local Search Marketing

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling