The "holy grail" of online shopping is local inventory information. Paradoxical as it may sound I say that because the overwhelming majority of transactions occur in local stores and that isn't going to change any time soon. Though e-commerce is growing fast, growing much faster is the influence of the Internet on offline transactions. Those Internet-influenced local transactions, worth more than $350 billion annually and climbing, typically start online in the form of price comparison shopping or product research.
Yet real-time inventory information has so far been elusive for most shopping sites – even those that offer local information, including ShopLocal, Yokel, Froogle, CNET and Become. All of these, to varying degrees, have local data but most of it is "proxy information" for inventory (i.e., item is normally carried or on special).
A new site called NearbyNow is pulling together real-time POS ("point of sale") inventory information from retailers large and small and presenting it through local-mall portal sites. The first up is for the company is Eastridge Mall in San Jose, Ca. On this site you can search for specific products and sale items. Nothing can be purchased online; it's all about driving people into local stores.
NearbyNow CEO Scott Dunlap says that virtually 100% of inventory is going to be there for all the stores in the mall. For example, here's a search for "kids shoes." I can see every store in the mall that sells kids shoes, the prices and the specific shoes available. It's much more efficient for consumers and the conversion rates for merchants are going to be very, very high. Retailers are also going to get a better sense of how the Internet is directly driving offline sales than from buying general paid-search.
A noteworthy site feature is the "reserve this product" in-store pickup capability (like Circuit City's very successful in-store pickup feature). Every item online can be "reserved" for onsite purchase at the local store. Consumers can be contacted by email or a store clerk to confirm the item is at the store or to otherwise inform them it's not (offering the opportunity to direct consumers to another store that does have the item).
Think about holiday shopping and how efficient this would be. Consumers could do all their local shopping online and then simply go from store to store at the mall picking up and paying for those items.
Another critical dimension of the offering is that NearbyNow is also working with in-mall kiosk vendors to provide the same product search onsite. In other words, a local shopping engine that offers comprehensive, structured data for only the stores in the mall, in the actual mall. NearbyNow has said it will sell contextually relevant or competitive ads on those kiosks (and its mall sites). And one can imagine that as much as the site will drive conversions, those in-mall searches and kiosk ads are going to drive even higher transaction rates.
The kiosk use case is similar to the wireless scenario that everyone has been salivating over for the past couple of years. The idea is that in a wireless context, the consumer is very close in time to a purchase and the need for the product or service is immediate. That's equally true for NeabyNow's mall sites and, even more so, for the in-mall kiosks. But there's the additional opportunity to expose and sell even more stuff to onsite consumers through the kiosks (or to users accessing the site on wireless devices).
Wireless users with smartphones (Motorola Q, Treo, Blackberry, etc.) will be able to perform those same local product searches, whether in transit or at the mall, by accessing the local mall site on their mobile devices. Dunlap said that text messaging is coming (and so are contextually relevant text-based advertising opportunities).
I also spoke to Dunlap about in-store kiosks as another potential layer of this offering – consumers within a Macy's or Bloomingdales search for inventory items and then are exposed to specials or offerings from other departments.
NearbyNow is currently buying paid search to build consumer awareness (driving people to product-specific results pages within the local mall site). But considerable promotion is going on within the local mall. In other words, the mall itself promotes its local shopping portal powered by NearbyNow. This is a highly qualified consumer audience that will likely be eager to use the mall site in the future.
In addition to providing the infrastructure for these local mall sites and kiosks, NearbyNow is in discussions to potentially license its local inventory data to third parties (think shopping engines, local newspapers, directories, etc.). Dunlap wants to do that in a careful way that doesn't promote e-commerce at the expense of the participating retailers. But I would expect NearbyNow's biz dev team to be very busy fairly soon.
I've argued many times in the past that shopping sites and portals will need to include local inventory information or be outflanked by those that eventually do. It's inevitable -- even more so now.