StepUp Makes the Local Connection for Web Searchers

There’s a school of thought that says the coming trend in e-commerce will be searching for products online and then buying them offline. Online shopping has lost its novelty for almost everyone, the thinking goes. People are looking to save on shipping; they want to have a physical place to take defective purchases for refunds and exchanges. And they’re often in the market for gratification more immediate than even the most overnight express delivery can provide.

The interplay between online research and offline buying is important enough that comScore Networks will include those offline conversions in its new qSearch Retail survey, intended to monitor consumer behavior from first search to final purchase. In announcing the project, comScore said that 60% to 90% of conversions after search occur offline. That jibes with findings last year by ForeSee Results that 86% of Internet shoppers said they prefer to buy locally when possible.

One way this trend might develop is if local search and mapping sites start bulking up their data with product feeds from local real-world retailers. Users can look for “digital cameras in San Jose” and instantly find brick-and-mortar merchants in the area, complete with brand names, prices and inventory availability. That’s what’s happening now on Google Base, Google Maps, Froogle and SuperPages.com, through the good offices of a company called StepUp Commerce.

San Francisco-based StepUp, founded in 2004, offers a software solution that makes it easy for small local retailers to link their product information to Internet sites via StepUp’s own hosted database. For that service, the company charges those merchants a monthly subscription fee that can be as low as $50 per category per location—a price that’s comfortable for retailers and comparable to the cost of Yellow Pages advertising.

“We’re a local shopping services company,” says Jad Dunning, StepUp president. “We help consumers figure out which stores in their local ZIP codes have the products they want to buy in stock and available. Through that, we help the local retailers use what they’re selling to drive very qualified foot traffic to their physical locations.” StepUp aggregates the product information, massages the categories and indexing, and then syndicates the data to Web product sites like Froogle, Superpages.com, PriceRunner and Oodle.”

“We’re all about shopping,” he says. “We’re not focusing on services or service providers. And within shopping, we’re targeting the small, local retailers rather than the big chains and helping them exploit the Internet as a viable marketing channel.”

Dunning says the majority of StepUp’s 3,500 to 4,000 retailer customers are local independents, not the big-box merchants. “These have been left behind in the advent of the Internet as a marketing medium,” he says. “They’ve been sold Web sites that sit out there and do nothing for them, and e-commerce applications that are not really core to their business.”

StepUp retail customers get a customizable store Web page, landing pages for individual products that include images, descriptions, prices, store information and locator maps, contact information and a link to their own Web site, if they have one.

“A lot of our customers use these pages as their main Web channel, because it does so much more for them than the typical static Web site,” Dunning says. “If they have their own Web site, they can also link to these product pages and use them.” He says about 45% of StepUp customers don’t have a freestanding Web site for their stores.

How does it work? The format varies depending on the search site to which StepUp is feeding data. But on Google Maps or Google Local, for example, a user who’s done the online research for a washing machine and decided that Maytag is his target brand can enter “Maytag San Francisco”. The result will be a map of the area with the usual pushpin displays. In this case, the first listing, highlighted with an information balloon, is for the wonderfully named “House of Louie” retail store on Bryant St. The balloon has a tab for the usual Google Map information—address, phone, driving directions and in this case a link to the House of Louie Web site—and another for “Details”.

It’s the second tab that uses the StepUp feed, offering a list of products and brands sold and a link offering “More from StepUp.com”. Clicking on that link takes you to the product pages designed for House of Louie, which offer specific models, with prices and stock availability for each one.

Dunning says StepUp focuses on certain retail product categories such as appliances, home and office furniture, and HVAC home goods. (At press time, the company planned to launch a foray into home theater equipment too.) Most of these are big-ticket, high-consideration items that include an important service element, either home installation or, in the case of air conditioning and home theater, perhaps in-home consultations before the sale.

Focusing on those large items also makes the job of monitoring availability easier. Most retailers in these categories don’t maintain warehouses full of stoves or washers; they take the order and then get drop-ship service on the SKUs from the manufacturers. The data feed process is also simplified in these categories, because StepUp can simply go to the manufacturers for product information; all they need from the retailer is the brands and models they sell. In many cases, manufacturers also control the product mix, so many retailers don’t even have to update that information.

But Dunning says StepUp is beta-testing a point-of-sale application that will help keep track of smaller items such as cameras, electronics and toys and may help StepUp break through to retailers of those smaller inventoried products. “If you’re going on vacation and you look up ‘digital cameras’ on the Web to find a local retailer, you want to be sure it’s in stock when you get there,” he says. “That’s not a big driver of our business right now, but we think it could be,” he says. “We’re being creative about the technology we need to make progress across a wider variety of categories.”

StepUp is using a flat fee structure now, but dunning says that as more small retailers begin to adopt the Web and its ways, they may become comfortable enough to accept performance-based pricing as well. Right now, though, they take comfort in knowing that their Internet marketing costs are predictable.

That fee includes monthly reporting that shows page views for their StepUp pages, the number of clicks on maps or directions, and in some cases call tracking.

As for adoption by retailers, “We’ve done pretty well,” Dunning says. “We were founded in ’04, and by the end of ’05 we had roughly 1,000 customers. Currently we’re at about 3,500.” StepUp maintains a small sales force that talks mostly to manufacturers about signing their dealers and distributors; the company also does a “fair amount” of direct marketing to retailers and is lining up sales partnerships with other sites and shopping portals.

Right now, StepUp sees its best online prospects in its links to the local search elements of the big search engines and to the Internet Yellow Pages.

“I’d say they’re more important to us today than the shopping comparison sites,” Dunning says. “Right now, the consumer who goes to a PriceRunner, Shopzilla or shopping.com is more conditioned to buy online and is looking for e-commerce pricing. But consumers who are on a general search engine or an IYP are probably as interested in finding local information as they are in anything else. But we just started with SuperPages.com in March, we just went live with Google Maps, and we’ve been working with Froogle and Google Base since last November. So it’s still pretty early in the adoption process.”

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