Ask the Expert

2/25/2014

- Max Braglia, Team Lead, Interactive Advertising

Q: "I am a retailer with several physical stores and a large e-commerce website. While search advertising is an obvious part of our marketing to increase online sales, we struggle to identify the connection between our online marketing efforts and our in-store sales. In other words, can online search ads impact offline store sales?"

A: In our always-connected and multi-screen world, this is a crucial question for multi-channel retailers, as the answer could determine how marketing dollars are allocated and measured.

According to a series of recent real-world experiments conducted in the U.S. and reported by Google on their Think Insights website, there seems to be a direct correlation between online search ads and offline store sales: the experiments prove that investing in search ads increased incremental offline store sales by an average of 1.46%, and the sales return on search ad spend was between 2x and 14x. These findings are significant, and smart multi-channel retailers should take note of them.  

It should not come as a surprise that most consumers base their buying decisions on online research. What’s really interesting is that, according to Accenture, 88% of consumers research items online and then end up buying in a physical store. This so called “digital consumer behavior” is having a growing impact on retail.  

Think about it: since human behavior delights in instant gratification, consumers will finish up their research and run out to their local store to buy their item immediately. Being able to touch, see, feel, and try on an item before buying is still an important appeal that stores have to consumers.

But, differently from the past, when people once visited stores with very little knowledge of the product they wanted to buy, today shoppers come into stores prepared. They have already spent time researching your website, which they may have found via a paid search ad.    

As a multi-channel retailer, understanding the full value of search ads in driving both online and offline sales can grow your customer base by making consumers more familiar with your brand and products, so that they can arrive to your store in a “ready-to-buy” state. To be effective, you must develop a reliable and consistent online presence, and use competitive pricing and promotions to your fullest advantage.

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