Service Seekers Stay Local

By SmallBusinessComputing Staff | Posted June 18, 2002
By Robyn Greenspan

While the global power of the Internet is largely recognized, Respond Networks has found that many American consumers use the Web to connect with local service-based businesses.

Respond's research indicates that approximately 60 percent of all online requests for quotes (RFQs) are for services, as opposed to hard goods. That figure is right in line with the U.S. Department of Commerce estimate that the service industry represents two-thirds (66 percent) of the total gross domestic product, totaling more than $2.5 trillion in the year 2000.

"The Internet is a great resource for consumers to research and purchase specific types of services, from insurance and mortgage brokers, to travel and real estate agents," said Lyn Chitow Oakes, president and CEO of Respond. "Our research shows that consumers are now using the Web for more complex transactions that require a high level of personal and typically localized service. As a result, the Internet presents a great opportunity for smaller, regionalized businesses to market and sell their services. As consumers continue to turn to the Web as a primary channel for buying services, we expect that this trend will continue to grow."

Key findings from the report include:

Requests for services have increased 180 percent in the last 14 months.

Hotels/motels, automobile insurance and real estate rentals are the most frequently requested services, accounting for more than 13 percent of all requests.

Of the 50 most often requested services categories, only three are technology-related: Internet providers, DSL providers and pagers.

Ten of the top 50 service categories are travel-related, reflecting the tremendous growth in online travel services in recent years.

Six of the top 50 service categories are insurance-related, reflecting widespread acceptance and trust in seeking insurance providers and rates online.

Some of the more surprising categories to reach the top 50 include massage therapy, dog breeders, tattooing and piercing, event and wedding planners, divorce attorneys and dentists.

More than 15 percent of all consumers looking for products and services on the Web fall outside of any metropolitan area, confirming the wide reach of the Internet and its ability to eliminate borders and geography as access barriers.

The findings are significant as they demonstrate increased reliance on the Internet, combined with geographic centralization. Surfers seem to be using the Web as a local phone book, searching for businesses in their own general vicinity.

"The findings that consumers are increasingly using the Internet to initiate commerce for a growing variety of services is an important trend for advertisers," commented Greg Stuart, president and CEO of the Interactive Advertising Bureau. "As the Internet continues to evolve and mature as a sales and marketing channel, advertisers will likewise be able to extend their efforts into new, valuable segments. The marketing of local services online clearly represents an immediate and compelling opportunity for advertisers."

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