EcommerceBytes-Update, Number 254 - January 10, 2010 - ISSN 1528-6703     3 of 6

Milo.com Creates Online Shopping Engine for Brick-and-Mortar Retail

By Greg Holden

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For impatient shoppers, there is now a way to bridge the gap between the ease of shopping online and the instant gratification of being able to buy something, bring it home, and install it the same day.

That's the idea behind Milo.com, a search engine with a difference. The difference is an emphasis on local, brick-and-mortar retailers. Milo.com takes into account the fact that many people who shop online really have no intention of completing the transaction with their computer: they want to see which stores have an item in stock, verify the price online, and then travel to a store in their immediate vicinity. Once there, they can touch and try out the item, then bring it home the same day.

The site's lead founder, Jack Abraham, 23, saw the need for the site while working at his father's company, the well-known digital-marketing intelligence service comScore.

"comScore analyzes people's behavior on the Internet, and that was a really cool introduction into technology and my interest in data," he explains. "We noticed that the Internet was driving way more offline sales than online sales. The offline portion is growing faster than online commerce. People love instant gratification. They want to touch and feel something now, and these are core impulses that just won't go away."

Though he only recently graduated from the University of Pennsylvania after designing his own major in the Wharton School of Business, Abraham already has experience in ecommerce. While in school, he created software that would do what he describes as "eBay arbitrage."

"The software would find all the instances of a product, like an Xbox 360, that were up for sale on eBay," he explains. "It would buy the product at a cheap price, relist it, and sell it for a higher price. It worked for a while before eBay shut us down."

Abraham's current venture, which he developed with co-founders Ted Dziuba (formerly of Google) and John Evans (now Milo.com's CTO), is being conducted with the full cooperation of participating retailers, who pay a subscription fee to be included in Milo.com's database. Currently, Milo.com returns results mostly from big-box retailers in a local area. For instance, when I searched for a Bodum coffee maker, I received results only from well-known stores like Target, Best Buy, and Office Depot. One nice feature: the results tell you whether the item is currently on the shelves of an actual store or out-of-stock.

Abraham acknowledges that Milo.com does not yet include small- to medium-size businesses in its database of 43,000 stores. At the current time, there is no way for an individual seller or small business owner to send his database to Milo.com by converting it to XML, for instance. However, the company is working on making an automated process that will enable businesses to join up. When they do so, they'll have to pay a subscription fee, though the exact cost depends on their size and the number of SKUs they offer.

Milo.com also has to expand its product offers to provide more depth, a fact Abraham acknowledges as well. The most popular items on the site are home and garden and consumer electronics items. Although I found the Bodum, I couldn't find more obscure espresso machines I was looking for.

Though Milo.com does meet a consumer's need to shop near home, it faces some challenges. For one thing, Google recently came out with its own local product search feature. And if a consumer looks up a product on Milo.com and goes into a store to select and pay for it in person, how does Milo.com make money on the sale?

Milo.com does give shoppers the ability to purchase through its site. In that case it earns an affiliate sales fee as well as the existing subscription fee from the retailer. But if a consumer makes the purchase in person, there's currently no way to know that the individual was directed to the store by Milo.com. In the future, said Abraham, shoppers may be offered a discount if they indicate to the store that they were referred by the search engine.

But Abraham explains that he didn't want to lock consumers in to having to make the purchase through Milo.com. "We wanted to build the site around the way people are shopping for it today rather than an easier business model. You get to go in the store and touch and feel the item and see how it looks so you know it can match your needs. It reduces the chances of buyer's remorse."

Still, Milo.com has a lot going for it. They have the input of Abraham's father Magid, the founder of comScore. And they have their offices in the same Palo Alto, California building where Google and PayPal were once located. Jack Abraham even positioned his desk where Google founder Sergey Brin once sat. It's in keeping with Milo.com's efforts to combine the online shopping experience with brick-and-mortar locations. "We think of ourselves as providing the best of both worlds," says Abraham.

Find Milo at Milo.com.


About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.


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