May 16, 2007, 12:00 AM

Smaller Top 500 retailers lean heavily on search engines

Smaller niche merchants in the Internet Retailer Top 500 Guide are more dependent on search engines to drive traffic and sales than their larger competitors, according to new data from Hitwise Inc.

Bill Briggs

Senior Editor

Smaller niche merchants in the Internet Retailer Top 500 Guide are more dependent on search engines to drive traffic and sales than their larger competitors, according to new data from web measurement company Hitwise Inc.

In early 2007, Hitwise measured the percentage of average monthly traffic each retailer in the Top 500 Guide received in 2006 and 2005. The results reveal that 50% of merchants ranked 400 to 500 depend on search engines to generate 50% or more of total site traffic.

For instance, PowerComplete LLC (No. 481), which owns and operates PowerComplete.com, a power tools and accessories e-commerce site, depended on search engines to generate 78% of monthly visits in 2006 and 75% in 2005. A small books, music, hobbies and electronics web merchant – BestPrices.com (No. 486) – received 67% of monthly visits from search engines last year and 68% in 2005.

In contrast, only one Top 100 retailer, Northern Tool + Equipment Catalog Co. (No. 76), generates as much as 39% of site traffic from search engines while most depend on search engines for 11% to 30% of monthly visits, according to Hitwise.

Of the top 100 retailers, 13 merchants generated 30.1% to 40% of all site traffic from search engines, compared with 50 between 20.1% and 30%; 31 from 10.1% to 20%; and 6 below 10%, Hitwise says. The Top 100 retailer with the smallest amount of search traffic was Disney Shopping Inc. (No. 60). In 2006, search engine shoppers accounted for just 3% of Disney’s site traffic vs. 12% in 2005, says Hitwise.

The Hitwise research shows that web-only merchants generate the highest percentage of monthly site traffic from search engines followed by consumer brand manufacturers, chain retailers and catalogs. Of the 224 virtual merchants ranked in the Top 500 Guide, monthly visits from search engines averaged 64%, compared with 30% for all 89 Top 500 catalog companies.

In comparison the average for all 145 Top 500 chain retailers and 42 consumer brand manufacturers was 28% and 27%, respectively.

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