(by Adam Strong)

With over 3000 attendees, the Internet Retailer show seemed to be buzzing with the type of energy seen in the early days of the internet.

I’m no MENSA member, but it’s always been my perception that a packed tradeshow full of attendees and sponsors means that a sector is white hot. The last 4 internet- related shows I attended were all very well attended and many, compared to previous shows, have grown dramatically. More sponsors, more attendees, more buzz, more press releases during shows. As examples : Domain Roundtable has grown dramatically from it’s first year in 2005. Last I heard TRAFFIC in Las Vegas was attended by over 500 people. . The Affiliate Summit in January was sold out. The recent GeoDomainExpo shows that even a highly targeted niche sector of the internet has grown big enough to have its own gathering. So, the Internet Retailer 2006 show is not alone and I would make a fairly safe bet that all of these shows will see more growth at their next locations. Internet business is on fire and the tradeshow business sure seems to be a good place to be as well!

Ok, so how does any of this Internet Retail show tie in to the direct navigation space (aka domains)? Since we all are online based businesses we’re essentially all in the same space so to speak. My thoughts are that the info coming out of any internet business show provides a perspective and insight that can relate directly to the future of any internet based niche. So, Frank asked me to write a bit about the show and since this is a domain oriented site, hopefully some of my immediate “take-aways” from the presentations will relate to the space.:)
As an entrepreneur and a wet behind the ears newbie considering a jump into the retail space with a start-up idea (no I won’t go into details . . . it’s incubating), I was overwhelmed by the amount of information packed into the IR show. Fortunately, the show provided a conference packet as thick as the yellow pages packed with the slides and bios from each presenter. This was an incredibly nice freebie to reference during the show and to take home. I also picked up the cd-rom version so I could listen to the presentations I missed later. You can see the agenda here.

There were a lot of facts and numbers presented by researchers throughout the show. All of them were very bullish on the future of the space. The growth of online retail is predicted to continue, but what’s amazing is that that the internet retail channel still represents a very small percentage of the whole of the retail world. Many of the top retailers on the Internet Retailer Top 500 are noticeably the multi-channel big box stores like Best Buy, Staples, Office Depot, etc or the manufacturers like Dell, Sony or HP, but it’s great to see the list also includes many pure play internet retailers. One statistic that amazed me was the low conversion ratios (1-5%) that were cited by some presenters. Remember, I’m new to internet retailing in general, but that number seems like it is very low and in desperate need of improvement.

An presentation by Heather Dougherty of Neilsen/NetRatings talked about user behaviors when shopping online for apparel. Heather didn’t get her presentation into the booklet on time so I’m hoping that I can track her down and cite some of it later. However, from what I can remember her company studied how users that purchased an item navigated to that store where the purchase was made, how long it took, where they came from , etc . Obviously there is some interest in this study as it can relate to the direct navigation/domain channel. Overall the study of these users showed that many of them preferred to “search” for the products (apparel) by brand rather than product type. In several of the cases the user typed in a brand straight into the address bar. Oldnavy.com for example, but in many cases they would land at a search engine first and perform the search for that brand. For example, they would go to yahoo and perform a search for “oldnavy.com”. HELLO WORLD! I didn’t realize that the “average joe” was still this handicapped when navigating the internet. Hey Joe, if you know the brand, why aren’t you navigating right to it by typing in Oldnavy.com into the browsers address bar?

The other point I found interesting from this was that shoppers are trending toward the brand search rather than an item search. This was very insightful from a direct navigation perspective. If there is a trend showing up in a study on shopping behaviors, can this correlate to a possible future trend that would lower the number of type-ins of generic, keyword-based domains in the future? As the consumer becomes more brand-aware on the internet will they continue to type the generic keyword into their browser? For example : I’m a user shopping online and I want to buy a sweater and I like Jcrew and Polo and I know I can get a cheap version at Old Navy, do I type in sweater.com as a direct navigation to find information/products on sweaters or do I bypass ths “search” activity. Since I already know where I can get the product I like, I can navigate right to those retailers by typing in the brand jcrew.com, polo.com, oldnavy.com etc

The last take-away I picked up was from a presentation by Safa Raschtchy of Piper Jaffray where he spoke about the Wall Street perspective on the e-retail space. He spoke about the impact of local search on e-commerce and gave an example that got me thinking about local search a bit more. He spoke about the next/last phase of the local search being for merchants to add real-time inventory based listings to the local search. For example, a shopper can presented with options not only of places to buy the particular product online but also options of locations nearby that actually have that exact item in stock, in your size and color and ready for pick-up. If you know the new sweater you want to buy is on the shelf ready to go in your size and color and you can pick it up on the way to your dinner date, there is an instant gratification and ease of use that will drive more shoppers to search online and buy offline.

What was interesting to me about this topic was I was actually faced with this exact sort of situation while in Chicago for the conference I was staying with friends who just bought a new condo. I wanted to purchase a house warming present and wanted to pick it up locally to be able to give it to them before I left. Of course, naturally as a domain owner, I went to telescopes.com first. I knew I wouldn’t be buying from them as it would take too long to get to me, but I was able to do research and find the types of products I should be buying. (a great feature of this site is the amount of information on buying a telescope for the newbie). Since I knew I wanted to buy offline to save time I went looking for a Chicago based shop on google by searching “telescope shop in Chicago”. Shoplocal.com comes up first but doesn’t really help me find what I want (contrary to it’s clever domain). It was virtually impossible on the limited time and internet access that I had to track down a shop within the 1-2 mile walking radius. It would have been nice to search for the item by city/location and be able to find a retailer with in a few blocks of my location and walk over and buy the telescope.

When this type of search is possible on the search engines it will definitely impact online buying. It will drive more shoppers to perform their search online and then make their purchases offline. This could impact pure play internet retailers who don’t have the benefit of a local brick and mortar location. I could also see an impact on the direct navigation channel as the shoppers gravitate away from direct navigation (telescopes.com) and toward the ease of finding what they want to buy nearby by performing local based searches. Obviously this innovation will be good news for the search advertising channel since the as this activity would increase, overall search advertising revenues would increase as well as more non-internet retailers convert to advertisers based on the notion that search engines could now bring more customers in the doors of their “brick and mortar” business.

I’ve got a lot of info buzzing around in my brain but this is a pretty good start on the topics that got me thinking about internet business in general and more specifically as it pertained both to the direct navigation channel and the new business venture I may soon be undertaking.

All in all it was an insightful show.

[Thank you Adam Strong]