Nielsen causes a stir

AdAge recently released a study by Nielsen suggesting that search played a small, and possibly shrinking, role in online retail sales.  Needless to say, this caused quite an uproar within the Online Marketing community, prompting an onslaught of blogs, posts, feedback, comments, questions and the like. Shop.org talked to the authors of the Nielsen report and asked a number of questions:

We have been tracking how the top 200 online retailers attract visitors to their sites for a few years now, and we have consistently found that, among those sites, IN AGGREGATE, search driven visits account for less than 15 percent of visits to retail Web sites (the number varies from quarter to quarter, but falls in a 10 – 15 percent range).

The survey authors went on to discuss the qualifiers of the survey that need to be taken into account:

1. We are looking only at the top 200 retail Web sites.
2. We use a rigid definition of a search referral where there needs to have been a click from a natural or paid search link.   If a person searches and then types a URL, that would be assigned to our ‘direct-to-site’ bucket.
3. The methodology that we use to look at the aggregate view of the top 200 is one that assigns a heavy weight to the bigger retailers.  We look at total referrals from each source divided by total visits.  As a result, the bigger retailers such as Amazon, eBay and Wal-Mart exert a high degree of influence over the total number.  When we look at individual retailers, we see a wide variation, even among retailers in the same category.

Rimmkaufman.com summarizes the extent of the Shop.org interview by saying:

The data is accurate for what it is. It represents data from the 200 largest retail sites, and shows the aggregated average percentages. In other words, the three largest “retailers” on the list have a hugely disproportionate impact on the final results. Those “retailers” are eBay, Amazon and Wal-Mart. Well, one could make a pretty good case that eBay isn’t a retailer at all, and that at this point Amazon is more of a “mall” than a retail site; indeed Google has started to consider Amazon a competitor.

When it comes down to it, “There’s no question about this; the key to success for most profitable retailers is customer retention, not acquisition.”

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