Internet tip: To make shingle first you must find the rock

OPINION: The old timer leaning against the bar at the Cardrona pub looked with distaste at the horde of ski bunnies descending on his local after a day on the slopes last week.

I hoped my old oilskin and muddy boots would prevent my being lumped in with school holiday yuppies, and took a possie at the bar beside him.

I said gidday and asked him what he did for a living. He said he was a quarryman, grinding rock into shingle and selling it to farmers, road makers and contractors.

He asked the same of me and I sheepishly told him I worked on the internet.

"The internet, I'll never sell any shingle on the internet. Waste of bloody time."

I got ready to disagree, but then realised he was right. His product was heavy, his clients were local and transportation was the biggest cost. The chances were good that he would never sell a single ounce of his weighty commodity on the information super highway.

For all the talk of the web changing the face of retailing, the vast majority takes place through old-fashioned bricks and mortar premises, rather than clicks and mortar. In round figures New Zealanders spend around $12,000 in traditional shops every year, for every man, woman and child. That equates to annual retail sales of almost $50 billion (excluding cars), according to the Retailers Association.

Of that $50b only about $3b is e-commerce. So that means in simple terms around 6 per cent of New Zealand retail spend is online.

As in most things (except good beer and ethical foreign policy) the United States is ahead of us, with e-commerce accounting for a bit over 7 per cent of retail spend in 2010, according to recent Forrester Research numbers. Interestingly though, Forrester sees this number growing by more than 10 per cent annually for the next four years to hit US$250b (NZ$348b) in 2014.

This is fine, but hardly the death of retail that was predicted a decade ago when the likes of Amazon, eBay and Froogle really took off. Despite all the predictions, the net hasn't killed high street.

But what has changed is the way that you find out what's down the street, where the street is, and whether your mates rate it. The same piece of research found that the growth of "web influenced" retail sales accounted for 42 per cent of retail sales (a whopping US$917b) and that will grow to 53 per cent by 2014.

IN MANY specialist sectors, the web-influenced figures are way higher. For instance locally, Nielsen Online has found that more than 70 per cent of consumers wanting to buy a house or a car carry out online research before they actively start the buying process.

And the chances are they will ask friends on Facebook or check out reference engines like Digg or Delicious, before they think of approaching a salesperson.

So while online sales still account for bugger all of total sales, online research is the way of the world. What does this mean for businesses selling goods and services, and wanting to future-proof their revenue? Worry less about being able to transact online, and more about being able to be found online.

Before you start investing heavily in web fulfilment or changing your media spend to include an online component, make sure you've got the basics right. These are likely to include the following:

Owning a simple URL that reflects your business. If your business is Smith Plumbing, then you should buy smithplumbing.co.nz today. It only costs $60 a year. And even if you just link it to a free site on Wordpress, it means you have got an operational website for virtually nothing (and your URL protected).

Make yourself Google-friendly by optimising for search. Google tells you how to do this on its Search Engine Optimization Starter Guide on its website, or try out keaseo.co.nz

If you have any money left over consider buying some adwords (the "sponsored links" that appear alongside the organic search returns). Remember the more specific the words the less you pay.

Ensure you put yourself in as many of the big online directories as possible, and get businesses that are friendly to you to link to you from their websites.

If it's easy then tweet or Facebook interesting stuff. If it's not easy, get your kids to do it for you. But no hard sell please.

E-commerce is growing at about four times the rate of traditional retail. But, the biggest online upside right now for retailers isn't about transacting, it's simply being able to be found. As the quarryman from Central Otago will tell you, you can't make shingle until you know where to find the rock.

Mike "MOD" O'Donnell is an online exponent, professional director and failed motorcycle racer.

- © Fairfax NZ News