Are Search Engines an E-Commerce Anachronism?

E-commerce is growing up. The signs are everywhere.

For one thing, the world's 600 million Internet users will spend more than US$1 trillion online by the end of this year, according to research firm IDC.

But in its burgeoning adolescence, e-commerce is stretching the seams of some Internet traditions -- and search engines are on the front lines.

Increasingly, mainstream e-shoppers no longer wander aimlessly in search of products. They have shopping lists, favorite online stores, and very little time to spare.

And the phrase "surf the Web," although lodged in the popular vernacular, grows more obsolete by the day.

Familiar Patterns

Clearly, people doing research online will continue to rely on search engines like Google to sift through the sea of Internet content.

But shoppers will turn less and less often to search engines in order to locate products. Indeed, some published reports indicate a measurable decline in search engine use over the past year.

Why? For one thing, online shoppers are starting to resemble offline shoppers. How often do you thumb through the yellow pages when making routine offline purchases?

You don't. You know exactly where to go to buy pet food, stereo equipment or books. As e-commerce trickles down to the mainstream population, it is no surprise that online shopping patterns are shifting to match offline behaviors.

Bookmarking Brands

In addition, brand is starting to mean something on the Internet. In each major product category, a small handful of e-tailers invariably stand out.

Companies like Amazon.com (Nasdaq: AMZN), Travelocity (Nasdaq: TVLY) and EBay (Nasdaq: EBAY) have virtual headlocks on customer mindshare.

And consumers list these sites in their Internet bookmark files so they can find them fast for quick shopping trips, omitting the search engine middleman from the process.

Clear Destinations

What is more, very few -- if any -- pure-play e-retailers remain. Amazon continues to sign brick-and-mortar partners such as Target (NYSE: TGT) and Circuit City (NYSE: CC) to service the ever-present multichannel consumer.

And traditional companies like Lands' End and Sears (NYSE: S) are integrating their online arms with the rest of their operations and marketing efforts.

As a result, brand loyalty is spreading across multiple sales channels, reaching wider populations of shoppers. Integrated marketing campaigns adeptly shuttle customers between specific Web sites, catalogs and stores.

Sparse competition from pure e-tailers makes these integrated campaigns more effective -- and, conversely, makes broad Internet searches more archaic.

Main Event

The next phase of e-commerce will relegate search engines even more solidly to a backup role. With the advent of Web Services, consumers presumably will log in at a single location and will conduct multiple related transactions with multiple merchants.

Dollar Rent a Car (NYSE: DTG), for instance, uses Web Services to link its reservation system with airlines' sites, allowing travelers to reserve rental cars without leaving an airline's Web site.

As more merchants forge such marketing and technology partnerships, e-commerce will become more event-driven than product-driven.

That is, consumers will conduct purchases related to a business trip or will make new home purchases as a series of related online shopping tasks. Therefore, making travel arrangements or buying furniture will no longer require a-la-carte transactions.

Crashing Search Party

In viral shopping scenarios like this, the process of searching the Web for a discrete product will have become outmoded.

We may be months or even years away from broad-based adoption of Web Services.

But even today, with strong multichannel brands, search engines are becoming more exclusively the tools of researchers than of shoppers.