Why Google Wanted Groupon and What It Means to Your Local Business

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Local buying of products and services is starting to look a lot like this:

  • A person wonders where to find a product or how to get a deal.
  • They turn to a search engine or local deal site and try to find the item locally. (Sure, people also just buy the product online, but increasingly they are simply finding the item and a nearby shop that has it in stock.)
  • They stick their smart phone back in their pocket and go get the item.

Look no farther than Google’s recent modifications to local search and something they are calling Place Search to validate this pattern.

shopping local
Image Kelly Sue via Flickr

Or, they sign-up for services such as Groupon, Milo.com, or Living Social so they can receive daily deal alerts on the products, services and entertainment they are seeking locally.

I’ve written in the past about this ideal of online to offline business or O2O as I think it’s an important competitive lever for the local small business. The idea is to drive people to your assets online (or at least make sure people find them when they search) and then use that awareness to drive them offline and into your local business where they can get the products and services they want conveniently and with a greater experience than a big box or online retailer can deliver. (I wrote about local businesses getting in location game here)

A couple striking news stories from last week highlight this trend in obvious ways. The local retailer must get their products and services featured in the new buying pattern and that clearly means being found online and on the mobile device.

  • Last week eBay bought shopping engine Milo.com to help it reach more consumers looking for products in nearby stores and browsing for bargains with mobile phones. (Business Week story)
  • Rumors also swirled last week that Google had offered somewhere between $5-6 Billion for local deal site Groupon. It is reported that Groupon turned the deal down, but it certainly signals Google’s intent to make a much larger push in the local shopping space.
  • In what feels a bit like the start of a buying frenzy, Amazon invested $175 million in local coupon site Living Social. This move signaled Amazon’s desire to be in the local game as well.

Small, local businesses need to get very active in this angle of the local search game or you will get left behind.

The following is a list of action steps that you should consider working on right now!


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