June 9, 2009, 12:00 AM

Search drives more sales, but shoppers think longer before buying

Search still drives conversions, but consumers are thinking harder and doing more research before they buy, a new study from Google Inc. finds.

Search is driving more sales for online retailers, according to a new study by Google and web analytics firm Compete Inc. But consumers’ online shopping and buying behavior has changed and e-retailers need to adjust their search strategy accordingly, Google says.

Using data from Compete’s panel of two million online consumers, Google’s analysis showed that in the apparel category, for example, the search-driven conversion rate increased to 4.5% in February 2009 from 4.2% a year earlier, after coming in at 4.4% in January 2009, the same as January 2008. However, consumers are taking longer from their initial click on a search term to make a purchase.

For example, in the first quarter of 2009, the percentage of apparel purchases made within two weeks of the first search click fell to 30.0% from 30.4% a year earlier, and the percentage of shoppers who made a purchase on the same day as the first search click fell to 54.5% from 55.3%. Meanwhile, the percentage of consumers who waited four weeks after the first click before making the purchase rose to 15.5% from 14.3% during that time. Those are all signs consumers are researching longer before making a purchase.

Google found similar results in office supplies, consumer electronics and other categories.

“Consumers are investing more in research before they actually make a purchase. They are taking more time to think it through,” says Sara Kleinberg, head of retail marketing at Google. While Google is continuing to analyze the reasons for consumers’ extended search times, Kleinberg adds, “I believe this is coming from people being more careful about their purchases and doing more research before they spend their money.”

Google is advising online retailers to take into account the lengthened time between initial search and purchase. One suggestion is to lengthen the amount of time they track consumers` behavior through cookies. “If you are not looking at four weeks (after purchase), or if you are only looking at one week, or at same-day purchases, you are missing some of the picture,” Kleinberg says.

Kleinberg also encourages online retailers using search to call out price guarantees, price matching or other key discount messages in their keyword purchasing strategies to attract and retain price-sensitive consumers. “Not every retailer is a discount retailer, but they need to be aware that this is how consumers are shopping and thinking, and they need to think about how that applies to their own strategy and positioning,” she says.

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