The ability to marry store inventory with search and promotions is an intriguing one for interactive local media. But what closes the loop on this vision?

Sherry Thomas-Zon, VP, local shopping, Local Corp. — the new name for Local.com — suggested this week at ILM West in San Francisco that inventory can serve as an anchor for a 360 shopping offering. The key is to break the components of shopping into functional departments instead of making it “one size fits all.”

“The opportunity is to add value across the retail mix,” said Thomas-Zon, former president of Krillion, which was recently acquired by Local. You don’t just want to have shopping content. “You want a shopping module. It is what product search looks like on site in a mobile context.”

Speed and convenience are key parts of it. Components include grab and go shopping, need it now, where to buy, nearby stores. Thomas-Zon noted that there are different types of shopping.

For instance, there might be high consideration items, contrasting with shopping types such as low-cost replenishment, habitual purchases with limited decision making, big-box stores, off-price stores and small format products.

A big chunk of the newspaper industry has banded together to adopt Find n Save, a shopping platform featuring a single place to review deals, product inventory, weekly specials, “cents off” grocery deals and local ads.

Participating newspaper companies include many of the companies participating in the Yahoo search and national advertising consortium and the Zillow real estate consortium. They include Gannett, MediaNews Group, McClatchy, Advance, Hearst, Cox, A.H. Belo and The Washington Post. More than 200 newspaper titles are involved.

Find n Save was launched last year by Travidia, a newspaper services vendor that has specialized in digital conversion of circular ads as well as directory solutions. The consortium is purchasing Travidia as part of the deal.

The conversion of the multibillion-dollar newspaper circular business to the digital age has been a tough one, although potentially lucrative. Chains such as Radio Shack, Target and Frys Electronics have increasingly looked to spend outside traditional newspaper channels as print circulation has declined.

Moreover, the way shoppers look for information has dramatically changed due to the ability to search for specific products and deals on the Internet. Most online circular solutions have not been fully searchable.

Early versions of Find n Save have tried to address these changes by offering a one-stop, fully searchable solution. The concept has been especially championed by McClatchy. As of today, the initial launch of Find n Save is live in 19 markets and will be in 21 markets by the end of the year.

For the newspaper industry, the question has been whether to get behind Find n Save, or Gannett-owned ShopLocal, which has many national accounts and has been similarly evolving. Gannett’s participation in Find n Save suggests they will seek to form a complementary solution. Another shopping solution that may prove complementary is AP’s iCircular product, which is oriented toward mobile users and may be seen as experimental.

To lead the new company, Find n Save has recruited former Yahoo Consortium leader Chris Tippie, who told BIA/Kelsey the advantage of the broad consortium is that it provides a truly national footprint, which is vital for circular advertisers. “Our goal is to have a Find n Save presence in every market in the U.S. For us, it is imperative to provide consistent delivery, uniform measurement and ease of engagement across all of our affiliate markets,” he said. “National retailers have been asking for this for some time.”

Tippie also said it is much better that a one-stop shopping approach be offered, even though deals, grocery coupons, inventory and national product ads might seem like unrelated items that newspapers just happen to sell.

“It is absolutely critical,” said Tippie. “Local newspapers provide terrific service to local retailers, and they provide a variety of different products. These are revealed to local shoppers in a variety of mechanisms. This provides a single interface that is searchable and optimized.”

Tippie also emphasized that local affiliates have a lot of leeway around such issues as sourcing local deals. “We don’t provide a daily deals product,” he noted. “We just make it better” by aggregating and optimizing them. Sacramento’s Find n Save, for instance, had been providing both Groupon deals and local newspaper deals.

One part of the shopping solution that will require more work to be fully integrated is a local retailer directory. Some newspapers are earning revenues from enhanced directory listings, including one developed by Travidia that will continue to be sold by Find n Save. These will likely to continue to be developed locally by each company.

Whether Find n Save is ultimately successful depends on a number of factors. The biggest is whether the national retailers will adopt the platform and switch their circular budgets to it. Many have been developing their own capabilities.

For McClatchy Digital head Chris Hendricks, Find n Save represents a new beginning for newspapers. “It is pushing what we want to do as an industry,” he told us. “We are working together to develop solutions that work for advertisers and consumers.” Hendricks envisions future iterations, for instance, in the tablet space.

The Deals space is so hot, yet there are many unanswered questions about it. We know it will be big, but who really knows what it is going to look like 18 months from now?

With that in mind, we have developed a brand-new addition to our regular conference schedule: Deals 3D, a day-and-a-half event taking place in the afternoon of July 18 and all of July 19 at the contemporary Mission Bay Conference Center at UC San Francisco. The event will feature 40+ top level executives and entrepreneurs; a lot of cool demos; and, well – our typically great BIA/Kelsey networking.

Keynotes include MasterCard’s Gary Kearns; AT&T Interactive’s David Krantz and Facebook Local’s Lexi Reese. Featured speakers include such leaders as Microsoft’s Charles Dyer; Foursquare’s Tristan Walker; Loopt’s Sam Altman; BuyWithMe’s Andrew Moss; Shopkick’s Evan Tana; and Savings.com CEO Loren Bendele.

Old friends like Greg Sterling are on the agenda, too, and the event is being cochaired by The Dealmap’s Jon Sofield. You can register here.

SPEAKERS: DEALS 3D (As of June 9)
Samy Aboel-Nil, President and COO, Tippr
Sam Altman, CEO, Loopt
Derek Beckmann, CEO, Descuentro Libre
Loren Bendele, CEO, Savings.com
Robert Boniface, COO, iCoupon
Lilia Martinez-Coburn, VP, TownHog
Matt Coen, CEO, Second Street Media
Kimberly Cook, VP, GreenLink Networks
Charles Dyer, Director, Mobile, Local and Commerce, Microsoft
Jonathan Dyke, COO, Edo Interactive
Perry Evans, Founder and CEO, Closely
Paul Gain, CEO, Monster Offers
Dave Galvan, VP, Schedulicity
Andrea Gilman, VP, MasterCard
David Goldfarb, President, YourBestDeals.com
Alistair Goodman, CEO, Placecast
Oliver Gratry, CFO, Analog Analytics
Jimmy Hendricks, CEO, DealCurrent
Gary Kearns, Group Executive, Information Services, MasterCard
Jonty Kelt, CEO, Group Commerce
Jim Kerr, VP, Triton Media
Jared Kopf, Founder, Homerun
David Krantz, President and CEO, AT&T Interactive
Terry Kukle, VP, Metroland
Bill Lange, CEO, Full Slate
Malcolm Lewis, Senior VP and GM, Local.com/SpreeBird
James Moran, Founder, Yipit
Andrew Moss, Chief Strategy Officer, BuyWithMe
Darin Myman, President and CEO, PeopleString
Florent Peyre, VP, Gilt City
Prashant Nedungadi, CEO, Nimble Commerce
Rich Razgaitis, GM, ReachLocal Deals, ReachLocal
Lexi Reese, Director, Local Sales, Facebook
Jon Sofield, VP, Business Development, The Dealmap
Greg Sterling, Senior Analyst, Opus Research
David Strebinger, CEO, Wantsa
Evan Tana, VP, Product Management, Shopkick
Vinicius Vacanti, Cofounder and CEO, Yipit
Dan Visnick, VP of Marketing, The Dealmap
Darren Waddell, VP, MerchantCircle
Josh Walker, CEO, CityVoter
Tristan Walker, Director, Foursquare
Stuart Wall, CEO, SignPost
Rebecca Watson, VP, RadiumOne

The purchase funnel that takes consumers from awareness to transaction and retention has been an article of faith among marketers for many years. TV advertising, for instance, is “upper funnel.” Yellow Pages, at the point of sales consideration, has been “lower funnel.”

Google has other ideas. Any purchase consideration must now consider the impact of search (of course). But the impact of ratings and reviews, check-ins and other proxies and extensions for word of mouth also play into it.

Speaking at San Diego Interactive Day, Google Director of Local & B2B Markets Sam Sebastian said that shopping drivers are now based on “stimulus,” “the first moment of truth” and “zero moment of truth.” The zero moment of truth — ZMOT — is based on passive information sought by consumers.

It is reflected well in an evaluation of Google data from January 2007 to December 2010 in the U.S., U.K., Brazil, France and Germany. During that period, searches for reviews were up 98 percent, searches for coupons were up 339 percent, local search was up 177 percent, and searches for weight loss were up 154 percent. Eighty-three percent generally rely on “trust places” like user ratings or product reviews, said Sebastian, citing data recently released by Booz Allen.

“New behavior drives a surge in search volume,” said Sebastian. “You have to sell, have to optimize and sell to repeat customers. [Especially when] they are making the emotional part of their decision.”

Auctions have influenced a more dynamic shopping environment, but aren’t very important and have ended up as just a niche shopping format, argues James Surowiecki in the June Wired (article not posted). Even on eBay, they just make up 31 percent of all sales.

It’s a far cry from 10 years ago, when Priceline founder Jay Walker argued that auctions and dynamic pricing would become so omnipresent that price tags were history.

What happened? Surowiecki argues that last-minute “sniping” buys have alienated ordinary shoppers. Also, bargains have become less common as the market matured and people on both sides of the transaction became savvier. Moreover, “the imperialism of search engines” made it so that sellers no longer need an eBay listing to get their products in front of customers.

“The more familiar people became with auctions, the less exciting they seemed,” says Surowiecki. “As the novelty wore off, other factors, like convenience, grew more important. So, too, did things like shopping costs. Once Internet shoppers came to see free or low-cost shipping as their birthright, eBay’s high shipping costs became a serious disadvantage.”

Consumers are the ultimate winner, however, “pricing as a whole has gotten more competitive, which means it’s more efficient. Getting a bargain in an auction is less important, because it’s easier to find bargains at traditional stores,” says Surowiecki. “In other words, most what seemed distinctive about auctions — dynamic pricing, the possibility of bargains, competition — is now common. “

Finally, we have the long awaited merger of a directory with a retail solution. Today, prior to its earnings call, Local.com announced it would integrate product and store availability into its growing suite of women-oriented services by acquiring Krillion.com. The sale price was $3.5 million.

When it was launched in 2006, Krillion was a real pioneer in bringing search engine optimization to the fore for products. It was built on the idea of tying products closely to vertical shopping categories. Some of its initial ideas didn’t work. SEO, for instance, proved to be a poor substitute for destination traffic when it comes to retail. But the company has continued innovating.

Local’s acquisition cost appears to have been well below Krillion’s $9.1 million capitalization, per peHUB. But it is more than a good deal. It gives Local entry to shopping, and pits it against other shopping-driven initiatives, including eBay, via its $75 million acquisition of Milo.com. Other major competitors include JiWire, Wishpond and now SaleLocator, a privately funded initiative. ShopLocal, of course, remains the granddaddy in the space as it ventures beyond the traditional domain of weekly store circulars.

Krillion comes with a rich set of features that should help Local right away. These include an archive of product images, and information on current pricing, manufacturer/ retailer discounts and real-time in-stock information.

It also has a structured index of 70,000+ products for 1,200 brands across a number of vertical categories, which now include appliances, baby gear, consumer electronics, computers, tools, video games and home & garden. More than 50,000 retail locations are tracked.

Most of this can now be neatly tied into Local.com’s expanding suite of services, which include Local’s directory, the Octane 360 SMB network, the Rovion rich media ad network, and Deals (via Spreebird, the newly announced brand for its deal a day). In addition to the Local properties, Krillion can continue to serve its own network, which includes Consumer Reports, SuperPages, ShopSavvy, Topix, Yp.com and The Find.com.

Under terms of the deal, Krillion CEO Sherry Thomas-Zon becomes Local.com’s VP, local shopping, and the 13-person company remains headquartered in Mountain View rather than relocating to Local’s Southern California location.

Facebook today launched its Deals product as an “alpha” in five markets: San Francisco, San Diego, Dallas, Austin and Atlanta. The effort plays up Facebook’s social connectivity, making it simple to “like” and share deals, and promote throughout the site. The launch comes at a time of rapid expansion in the deals space. Google Offers has also just quietly launched a test product in Portland, Oregon; New York City; San Francisco; and Oakland, California.

The launch of a socially driven deals site stands in contrast to some of the newer deal sites, which play down the social elements of deals, as massive email lists and deal exchanges dwarf the role that viral leads have played. But nobody else quite has the clout of Facebook for social.

Deals has been given its own section on the left-hand menu bar, above Groups and Marketplaces, its socially driven classifieds product with Oodle. They’re also tied to Events on the right hand menu (if it is an event). Time and location of the event are put on top. Users can also see which friends have purchased the event. “Deals Near You” is another section.

The deals have clearly been designed to make it easy for businesses to add their own deals, rather than rely on the small inventory of email driven deal sites (i.e., Groupon and LivingSocial). It also encourages deals of different sizes, enabling low priced deals such as coffee discounts for instance.

The whole thing is getting a high-profile launch. When I logged on to Facebook this morning, for instance, deals were promoted as a popup before I had access to the rest of Facebook (I live in San Diego, one of the alpha markets). The pop up let me personalize deals for town and ZIP code. Users can buy deals with their credit card or with “Facebook credits” from check-ins, etc.

In addition to possibly collecting commissions on deals, Facebook appears likely to reap some straight-ahead advertising revenues. In a PDF that businesses can download, Facebook indicates that businesses are “eligible” to advertise sponsored units.

In sum, we’d note that Facebook definitely has some major advantages in this space. Just witness how EventBrite has leveraged Facebook mentions for its event sales. It figures every Facebook mention is worth about $2.50. BIA/Kelsey research shows that 48 percent of SMBs now report some type of interaction with Facebook.

What Facebook doesn’t seem to have are feet on the street and telemarketers. The thousands of salespeople that leaders like Groupon and LivingSocial have on board definitely help move local small businesses out of their inertia. Facebook will go fairly far with self serve. But how far?

Chicago Magazine will partner with Next Jump April 28 for “Intersections of Style,” a “VIP Shopping Night” that will bring thousands of Chicagoans to select stores offering exclusive discounts and perks (i.e., “champagne check-in”). The event is being promoted by Chicago Shopping, a new shopping portal by the Chicago Tribune, which partners with Next Jump to provide curated offers to consumers based on their personal interests.

Speaking today at Where 2.0 in Santa Clara, Next Jump CEO Charles Kim said the Intersections of Style event was modeled on a September event held in New York that featured 43 stores in SoHo and the Meatpacking District. The a-ha moment for that event was the use of a simple check-in app for invited guests. It would have otherwise been impossible to check in the 108,000 members of the site who had RSVP’d. Members who check in for the Chicago event will receive 1,000 WOW reward points.

Kim says the service, which began in 1994, uses its database and tracking tech to not only provide leads to stores, but also to “understand what consumers are doing and the time and location of their activity.” It discerned, for instance, that 80 percent of its New York VIP Night attendees were “new” to the service, and that 30 percent actually came from outside the city. It also knew that visitors typically visit three to six core “origination” stores, and then branch out to others based on their personal interests.

Next Jump manages 90,000 enterprise databases and has 30,000 merchant partners. Its white-label partners not only include the Chicago Tribune (and sister Tribune paper, the LA Times), but also such players as MasterCard, Barnes & Noble and AARP Discount Club.

When hyperlocal zeroes in on local marketplaces, it makes a lot more sense to me. Witness ShopBuffalo, an attractive new marketplace from The Buffalo News launched as a companion to Buffalo.com. The site has partnered with ShopCity and Hero, a local design firm.

Launched March 31 as part of a broader redesign, ShopBuffalo provides free business profiles, adding premium tiers priced at $47 and $97 a month. Businesses can claim them and flesh them out with Facebook and Twitter links, online inventory feeds, coupons, deals, gift certificates, video, event calendars and maps — a very well-conceived set of services. As with other ShopCity partnerships, “shop locally” is a major theme. Merchants are encouraged to promote their own presence via in-store signage. The site also features overall community pages for merchant news and events.

Buffalo News’ Emily Lowrey tells us that ShopBuffalo was developed as a piece of the broader site, which targets 13- to 30-year-olds who are not traditional newspaper readers. She’s not kidding about that. The animated characters that hover in the logo on Buffalo.com’s home page — designed by Hero — could be from a “Star Wars” comic. Another component of the beta is PaperG’s Flyerboard, which lets organizations and merchants post announcements and send additional information on request.

Lowrey notes that the site also has a strong community component. The five-person team that launched Buffalo.com — Manager Ben Kirst, a part-time manager, plus sales and content coordinators/creators — is working with community organizations now to get Neighborhood Goods and a few other really positive projects running.” She adds that site has not had any formal marketing while it is in beta, but will begin a major promotional campaign within two weeks.

Retail inventory has been revving up as a new, highly mobile-oriented tool for retailers to highlight stock on hand and steer consumers to store locations. It is an important lead-generating feature on new shopping portals, such as FindnSave. Research by JiWire shows that 62 percent of consumers seek product availability when researching goods online. The company also notes that “low consideration goods found in local shopping centers” are core to inventory promotion.

Key entrants in the space include JiWire, via its acquisition of NearByNow; eBay, via its $75 million acquisition of Milo.com last year; ShopSavvy; and now Google, which is diving in via Google Product Search, a spin-off of Google Base, the now defunct classifieds aggregation product.

Vancouver-based Wishpond, an angel-funded company, is another entrant. Wishpond has largely positioned itself as a platform, equally focusing on inventory from both local and national retailers. The others have focused more explicitly on national retailers.

The company has signed up 1,700 retailers in the U.S. and Canada and seeks to differentiate itself by enabling merchants to upload their product inventory in a variety of ways. In addition to providing retailers with free self-serve management tools, merchants can import their inventory via Web crawling, shopping cart plug-ins, batch upload, through their Point of Sales system and other methods. Wishpond also goes beyond inventory by adding real-time price checks, stock availability checking and merchant meta data. It offers these data to publishers and mobile app developers through an open API.

We don’t comment here on how unique these solutions are. All the contenders in the space claim to be unique. But the combination of broader reach and inventory upload options have helped Wishpond build an inventory of 6 million products, or twice as many as reported by Milo.com, which has some local stores but is more focused on a number of large, core accounts.

“The consumer starts their search for a product or item, not a retailer,” says Wishpond founder and CEO Ali Tajsekandar. “We help retailers get their products seen by local consumers wherever they are searching online — Facebook, Twitter, Google, Mobile and more.” By working with Wishpond, retailers will see their product inventory distributed to search engines and other sites where consumers are most likely to search for it, including Google Product Search, Facebook, Twitter and various mobile apps.

Wishpond also helps companies manage their online promotions on various ad channels and social networks. “We can help a merchant set up a Facebook “store” in a few clicks,” he notes. “Once connected, the fans can browse promotional products or search full inventory and find location details on the nearest branch that carries a given product.”

While monetizing has not been a core focus as it ramps up, Tajsekandar notes that Wishpond has a program for upselling stores to various SEM packages for merchants that want to give their inventory and promotions greater visibility.