September 30, 2004

Site Helps Retailers Tout Local Deals

By Evan Schuman, eWEEK

One problem that retailers have with the World Wide Web is that it's so ... well ... worldwide. A group of newspaper publishers tried to address that issue Thursday with the launch of a Web site intended to match consumers looking for specific products with local retailers that have those products on special promotions.

The problem the site is tackling is straightforward: Consumers looking for a particular product often want to just see local merchants—and especially local merchants who have current specials or coupons on the desired product.

The site—called ShopLocal.com—charges retailers no more than 40 cents per consumer per day for that connection, said David Hamel, chief marketing officer at CrossMedia Services Inc., which manages the site.

ShopLocal.com is a service of three of the nation's largest consumer publishing companies: Gannett (101 newspapers including USA Today); Knight Ridder (57 newspapers including the Philadelphia Inquirer, the Miami Herald and the San Jose Mercury News); and the Tribune Company (12 newspapers including the Los Angeles Times, Chicago Tribune and Newsday). It also will connect with consumers through America Online Inc.'s InStore.com.

Beyond the referral, CrossMedia is promising retailers a wide range of aggregated data limited to the customer prospects they are sent, in addition to aggregated data about the full ShopLocal.com readership.

"We'll tell retailers what people looked for, what they found, what particular items they looked at, and we can even tell them what they looked for and didn't find," Hamel said.

Initially, the site will be limited to displaying—on a ZIP code basis—items that are on special sales, but Hamel said the site soon will be able to display all of the retailer's products and integrate information such as hours and possibly inventory.

This way, if a customer needs to find a retailer that is open after 5 p.m. or on Saturday or Sunday, the site could display just those that are appropriate. Or if the site knew that only four retailers actually had the desired item in stock, it could have the option to limit to the display in that way as well.

The concept for the site grew out of the display advertising that the publishers' newspapers have been doing locally. One result of that background is that the site will accept any good digital graphic file and will make it into an online ad, removing the need for a retailer to create an online-only ad for a promotion that may last only a few days.

The company talks of a 40 cent rate per user per day—instead of per click or per session. The premise is that consumers may visit the site several times during the day before deciding to drive to the retailer. The retailer would pay 40 cents no matter how many times that day the consumer visited the ad.

But with AOL and some of the nation's largest newspapers behind it, the potential number of visitors could quickly blow out a retailer's online budget. Hamel said they will allow retailers to set a ceiling on their budget amount "so the ads can either be pulled down or the [retailer] can find some incremental money."

With the large number of tire-kickers surfing Web stores, isn't it a big risk for a retailer to agree to pay for visitors who may never buy anything? "It's just like buying a newspaper circular," Hamel said. "There's a leap of faith."