SHOPLOCAL ZEROS IN ON “UNIQUE SHOPPING SOLUTIONS”

The Local Onliner - May 1, 2007 –

ShopLocal, the shopping service owned by Tribune, Gannett and McClatchy, often gets overlooked in the glare of Amazon, eBay and the pricing comparison engines. But the service’s three networks are now getting over 200 million page views a month, which bests Yahoo! Shopping. It also has contracts with the vast majority of Big Box retailers.

For ShopLocal’s owners, which valued it at $85 million last year, the 200 employee company’s existence would be justified if it simply reinforced the print circular contracts of the big retailers. But long-term, the company has bigger fish to fry.

I met with CEO Vikram Sharma and CMO Bob Armour in the company’s Chicago headquarters, two blocks from the Tribune building. Sharma’s roots are with IRI, the major retail and grocery research firm, and he’s been in the executive offices at ShopLocal for two years. He replaced founder Brian Hand in February.

Sharma says the company’s mandate is “to build community around shopping. We’re not eBay, or Amazon. We’re mainstream America.” He notes the company is resolutely focused on driving shoppers into the stores, where 93 percent of “online shopping” really takes place, rather than ecommerce, which only accounts for seven percent – although it is also supported. Armour adds: “You’re not going to buy a banana online…you’re not going to buy a sofa online very often.”

A core effort for the company has been the digitization of local newspaper circulars, and it continues to grow. The “Smart Circular” product competes with vendors such as Vertis and Travidia.

When ShopLocal kicked into gear seven years ago after a massive rollup of shopping sites, there was some question whether the Big Box stores would be interested in local “adversioning” of their circulars. But Sharma says everyone is doing adversioning now, and it is core strength. He also notes that the traffic and page views for its SmartCircular retailers are up 30-to 60 percent from last year.

Non-core, the company is focused on integrating a host of other services, including its “three flavors” of shopper emails. They reach 600,000 today, and should reach one million by the end of 2007. They include “What’s on Sale in Your Market,” “Hot Deals,” and product-focused efforts. ShopLocal is also pushing hard into various verticals, such as home and garden, furniture and consumer packaged goods.

Technology-wise, the company is trying to reinforce its retailer ties via Smart Media, a rich media service that allows their time-sensitive, localized promotions data to be inserted into a host of other media sites on demand. The service was initially rolled out as “PaperBoy” with partner PointRoll, which is owned by Gannett, a co-owner of ShopLocal.

But more contracts today are being handled in partnership with DoubleClick, which is being purchased by Google. That suggests that Google will eventually play a role in the service. The prospect doesn’t seem to bother Sharma and Armour at all. “We’re bringing a unique retail component to the table here,” says Armour.

One area that has been a disappointment is ShopLocal’s effort to reach into the directory space with a services guide. The directory is up, and “many moms and pop stores” are featured today. But the effort has not really taken off and it is not going to be a near term priority, says Armour. It certainly is not aspiring to be the next Yellow Pages.

“Services are a slog for everybody,” he says. “However, the game is not over yet, and we hope to crack the code. We remain committed to providing advertising vehicles to drive shoppers to small and local businesses.”