Yokel Aims for Local Shopping Search Niche

A group of executives from Internet companies such as Lycos and Yahoo Shopping have launched a tightly focused local shopping search engine they say will help shoppers pinpoint retailers whether they want to buy online or off.

Yokel.com features both a national site and a local site focused on the Boston market that will contain a deeper database of small- and mid-sized retailers. Eventually, additional local sites will follow.

The Local Advantage

The idea is to help the vast majority of Web shoppers who still want to buy in traditional retail settings, co-founder and CEO Scott Randall told the E-Commerce Times. Randall is the former CEO of online auction site FairMarket — eventually sold to eBay — and onetime president of Yahoo Shopping.

“E-commerce has been going for 10 years plus now and what’s interesting is that still 97 percent of stuff gets bought off-line,” Randall said. “People want to research it online, but they want to go to the store, see it, touch it and feel it before they buy it in a lot of cases.”

Yokel has spent much of its pre-launch time developing the deep database required to provide such local results. Users type in what they’re looking for and their city or ZIP code and the search engine returns locally focused results.

In addition to results from the Yokel database, searches are accompanied with pay-per-click advertising and eventually may include featured or sponsored listings or special offers from local merchants.

“General search has come a long way, but because it is so general, it doesn’t do a good job in local shopping search,” said Randall, who founded Yokel along with former Lycos VP Don Zereski. “Even local versions still don’t do a great job because the data doesn’t really exist. You might get some hits, but you also get a bunch of junk returned in the results and that overwhelms users.”

Deep Data Draw

Randall believes Yokel’s advantage — and its protection against search giants such as Google and Yahoo swooping into its niche — is the data it has assembled. The growing list now at 1.5 million retailers has come from crawling the Web and by working with product manufacturers, who provide lists of retail outlets for their products. “We get it and throw it into the database,” he said.

The search engine also “interprets the data with a shopping prism,” to help refine results, Randall added. Some listings will have links to Web sites, others will have only addresses and phone numbers. In the Boston Yokel.com local site, the data “goes even deeper” to include “lots of small local guys who might not have any presence on the Web.”

Yokel results also feed into some major search engines. “They’re one level higher than we are — their local searches are not just shopping but other stuff as well,” Randall said. “The difference is compiling the data. That’s not their business so we’re not that worried they’ll try to duplicate what we do.”

Over time, Yokel expects to be able to find other ways to monetize its service, including charging merchants for their listings or for the right to enhance their listings with coupons or other offers.

Booming Space

Yokel is launching into a market that is expected to see exponential growth in coming years as local search matures. The Kelsey Group forecasts that local search advertising will grow to US$13 billion by 2010, up from $3.4 billion in 2005.

Part of Yokel’s premise is that consumers will continue to shop and research online but buy offline. During the first three months of 2006, half of all U.S. households researched at least one product online, and Forrester Research estimates that in 2005 there were 300 million such mixed transactions, representing $100 billion in local purchases.

With that kind of growth and opportunity, there is no shortage of firms aiming at the same niche and tackling the same problem, which Sterling Market Intelligence Principal Analyst Greg Sterling calls the “fragmented and inefficient” nature of the local market.

“Even if you’ve got a better relevance algorithm for local, you still have the problem of data collection — getting accurate and complete local information into your site,” Sterling said. “And then there’s the business model. If you’re selling ads, you have to have visibility and traffic.

“The local opportunity is very large,” he added. “But the small business segment is diverse and hard to reach efficiently.”