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Brick-and-mortar retailers may face challenges in competing online, but pure-play online retailers that think they've won the ecommerce game shouldn't count out their old-school competitors.

In fact, in some product categories, brick-and-mortar retailers are starting to beat out pure-play retailers.

According to new research published by Conductor, "the last 12-18 months have seen traditional brick and mortar companies step up their game when it comes to online commerce."

It came to this conclusion after looking at Google organic search results for the top 100 products in each of three competitive categories: electronics, toys and jewelry.

While pure-play ecommerce companies appeared in the top five results 39% of the time and and brick-and-mortar retailers appeared 26% of the time, Conductor surmises that "brick and mortars have made substantial inroads in the search results" based on its analysis of historical data.

And there's reason to believe that the gap will narrow in the coming years: in the toys category, the brick-and-mortar retailers are now beating out their ecommerce competitors by a margin of 34% to 30%.

Learning the ropes

So how are the brick-and-mortars catching up? Conductor suggests that these players have learned that throwing lots and lots of money at paid search isn't a long term strategy. In fact, Conductor says one big-name retailer has slashed its paid search spend by some 85% in the past two years.

Evidence of a strategic shift can be seen when looking at retailers like Walmart, which is making a concerted effort to extend its offline dominance to the web.

Not everything they're doing will succeed, of course, but not surprisingly, retailers investing strategically in digital initiatives -- like Walmart and Target -- appear to be seeing the greatest overall gains, with Conductor noting that they "now appear most often in the search results."

Does omnichannel equal checkmate?

Obviously, pure-play online retailers probably aren't thrilled that brick-and-mortar companies they thought were left in the dust are making significant gains in search. And they have plenty of reason to worry.

With omnichannel retail gaining more and more steam, brick-and-mortar retailers may find they have significant advantages -- advantages which pure-play retailers like Amazon can only counter with less-compelling physical experiences.

Patricio Robles

Published 17 January, 2013 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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howard masters

Hence why there is a growing trend for online retailers to move into bricks and mortar. The Woolroom is an interesting example I came across the other day.

over 3 years ago

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