May 31, 2006, 12:00 AM

Are We There Yet?

How online maps are helping to put the multi-channel in multi-channel retailing - and how the map providers are changing their approach to expand distribution.

Chances are most consumers who frequent the Internet know MapQuest.com. Mapping and driving directions are one of the most popular resources on the web. MapQuest’s Business Solutions, the unit that provides that mapping functionality to third parties, is less generally known-that is, unless you’re a retailer: MapQuest is the provider for about 6 out of every 10 retailers that make maps available to consumers on their sites.

That makes MapQuest currently the largest provider of maps and road directions to retailers and other third parties, at a time when consumers are coming to expect them as an extension of store locator features attached to the web sites of larger multi-channel retailers and others.

Shifting landscape

MapQuest, owned by AOL, is the longest-established mapping services provider online and in little imminent danger of losing its first-mover advantage. But the landscape is shifting. Online maps’ appeal to consumers, and their ability when posted on a retail site to help lock in online shoppers for the last mile of web-to-store purchases, have attracted the attention of other providers willing to supply sites with maps and road directions on a third-party basis.

And there’s a twist: MapQuest has built a business model on selling such services, with b2b pricing for its licensed products starting at an annual $5,000, and going higher depending on usage and the particular feature set involved. But since last year, both Google and Yahoo have offered an application programming interface that allows web developers-and the retailers and other businesses they work for-to access a degree of mapping functionality and put it on their site for free.

What do the portals get out of offering at no charge some of the mapping capacity that has been provided at a fee? Brand exposure, for one thing. “One of the things we get is name recognition by making sure folks have access to our maps, whether they are on a Yahoo site, a retailer’s site, a blog or wherever,” says Vince Maniago, product manager for Yahoo Local and Maps.

It also helps position the portals for potential local advertising opportunities in the future. “It means they will have a larger share of the Internet mapping business,” says Matt Booth, vice president and program director of interactive local media at local search and advertising consultants The Kelsey Group. “Over time, many people believe, the larger the control you have over mapping services, the more advertising and the more integrated services you will be able to run on maps.”

Maps and inventory

For example, in a recent earnings call, Google discussed its hopes to integrate live inventory data feeds directly into its online maps in the future, allowing consumers to mouse over a map see what’s in stock in a local store without having to leave the house or call to find out. “Over time, it makes sense to have live inventory feeds go directly to a map. Then you can run interstitial advertising over them as well,” says Booth.

The free APIs currently don’t offer the same degree of customization to the business user that the licensed products from MapQuest do, but “free” can be a powerful incentive, particularly for smaller retailers that might not otherwise have access to maps. And in fact, MapQuest covered its bases by adding a free API to its lineup of mapping products a few months ago. That free API expands the b2b options at MapQuest from a web services product all the way to an entire licensed mapping platform the retailer can run behind its own firewall.

The marketplace will determine the relative merits of the free APIs for the business owners that use them and the portals that offer them. And increasingly, advanced functionality tied to mapping services on the site will become a means of retail site differentiation. But in the meantime, rising competition among mapping service providers is sending a clear message to retailers: It’s not enough to tell customers where you are, you also have to tell them exactly how to get there.

“The value of location awareness in retail goes well beyond the simple and what we now think of as ubiquitous store locator, ” says Christian Dwyer, MapQuest’s director of operations. “Look at where retailers are going-they are offering the ability to research online, purchase in the store, buy it online and do store pickup and return. Location awareness is becoming a key enabler for an effective multi-channel strategy.”

Staying on-site

MapQuest.com is just one of the online destinations that afford consumers the ability to enter an address and find maps and driving directions. But going to MapQuest.com or Google or Yahoo maps takes customers off the retailer’s site and requires them to take the extra steps of entering those coordinates to get the information.

That puts more distance between the customer and the purchase. It may even take shoppers past competitors’ advertising, depending on how they search for store maps on those portals. From a strategic perspective, requiring shoppers to hop off their site in pursuit of a purchase goes counter to online retailers’ desire to exercise as much control over their customers’ experience as possible.

Yahoo is one such portal, and while traffic and eyeballs are currency to a portal, Yahoo recognizes merchants’ desire for control. “We have not done any merchant research to explore that value, but certainly, that is one of the reasons we offer the syndication of the API that lets you put our maps on your site, so that you can control that experience completely,” says Maniago.

Similarly, while MapQuest, also a destination in its own right, says it hasn’t quantified the value to retailers of putting maps and directions directly on retail sites, “Certainly having a customer go to a web site and stay there without having to link off of it is of tremendous value, especially when you think of that multi-channel retail strategy,” says MapQuest’s Dwyer. “You don’t want people coming to your web site, getting a list of stores and then having to cut and paste that address into a web site like MapQuest.com to get the directions and go to that store. You want to be full service and retain that customer within the retailing experience you are creating on your web site.”

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