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November 2003 |
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By: Joop Rijk, Editor |
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| Shopping Search Engines |
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New Opportunities For Consumers And Merchants
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In what has become a lucrative niche on the web; price comparison shopping sites are simplifying life for bargain hunters. Their specialized features allow consumers to compare product types, products features and pricing at one location before they go to retail sites to buy.
Shopping comparison sites are having an increasing impact not just online, but on purchases made in stores as well. Consumers are using shopping comparison sites for finding ballpark prices for products they actually buy offline.
According to a recent study by Jupiter Research, 28 percent of all consumers who buy a product visit a shopping comparison site before they buy. In August alone, more than 21 million online users, or 16 percent of active U.S. Internet users, visited one or more comparison shopping sites, according to Nielsen/NetRatings, an Internet audience measurement and analysis firm.
Merchants are benefiting from comparison shopping sites as well. According to a study by Forrester Research in May of 2003, 28 percent of merchants are using comparison shopping sites and 86 percent found them to be very effective. That beats banner and pop-up ads, e-mail promotions and deals with shopping portals.
Comparing More Than Price
Shopping comparison sites are no longer just about comparing price. Consumers are increasingly comparing other features and functionality along with user and merchant reviews.
The consumer types in what they are looking for, and gets a list of vendors. The sites often compute sales tax and shipping prices, and show how other shoppers rated the product. From there, the consumer picks a product and is taken to the check out of the merchants web site. The merchant usually pays a click-through referral fee to the shopping comparison site. Some merchants pay extra to be listed higher as a featured merchant.
Most of the shoppers using shopping comparison sites go for the bargains. The sites make plain which merchants offer the best deal and can alert users when an object of desire falls within their price range.
However, some sites have found that consumers may not always click on the lowest price. Many look at the merchants feedback from other users and often favor brand name product from better-known vendors. This is especially true for business users who are willing to pay a little more to avoid late shipments or lousy service from an unknown vendor.
A survey of 1,100 DealTime.com (now Shopping.com) users in late-December 2002 found that the main reason for using shopping search services was to compare prices quickly (73 percent), followed by wanting to compare products (54 percent) and to find stores selling the products they were interested in (45 percent).
Merchants need a high conversion rate to make a profit at the shopping comparison sites. People who frequently use shopping sites are savvy consumers and they click around a lot and more clicks add to the cost. Merchants need to make sure the conversion rate is high enough to handle the additional cost.
Merchants with the highest prices for certain items will not do well in shopping comparison sites. For them, a good strategy is to put niche products in the shopping search and look for areas that are not being covered by competitors.
Who Are The Players?
Product search has become an increasingly competitive market on the Internet, with comparison shopping sites like Shopping.com, BizRate and PriceGrabber battling to be the launch point for online consumer purchases.
Leading the pack of shopping comparison sites is Shopping.com, which attracted 11.9 million unique visitors from home and work in August 2003. BizRate Shopping garnered 5.9 million visitors in the same month. PriceGrabber grew 81 percent in the past year to draw 3.9 million shoppers.
Shopping.com
Shopping.com Inc. is the result of a merger that combined the search and shopping capabilities of DealTime.com with the comparison and research features of Epinions.com. Shopping.com runs a paid placement auction where you can specify the cost-per-click you're willing to pay. The service gives users greater depth of product recommendations, including more than 1 million consumer reviews with price information on 5 million products from 3,000 retailers.
PriceGrabber
PriceGrabber is a comparison shopping web site that offers visitors all sorts of pre-sales information, including product reviews, specifications, images and other related information. The site serves 500 large retailers and provides a storefront to about 1,000 companies that want to sell via the web, but do not have their own online presence. When displaying merchants, PriceGrabber lists featured merchants first - those who pay more, but they are listed as such. Additional listings are based on popularity, retailer and product ratings. Also, customers can re-sort the listings by price or certain other features. The firm is paid on the basis of click-throughs.
BizRate
BizRates strengths are its advanced research features and ratings capabilities. In early October of this year, the BizRate had 33,000 merchants listed for which it provided product information. BizRate provides more products data than any other comparison shopping site and claims it looks at an average of 20,000 surveys on each merchant before they issue a rating. BizRate accepts merchant feeds in a paid placement environment and provides information on paid retailers and those who do not pay commissions to BizRate.
Shopping portals
Shopping comparison sites will increasingly face competition from the major portals Yahoo, MSN and AOL, which all have shopping channels.
Yahoo
Yahoo may be willing to include a merchants products in the Yahoos Shopping area, based on its own crawl for free, or you can take advantage of the Yahoo Product Submit. Yahoo does not seem to give internal products (those in Yahoo stores), or paid search feeds higher rankings in the search results.
Yahoo Shoppings allows customers to compare products first on price and later on other features, again from all Internet retailers, not just the 15,000 retailers who pay to be part of the service.
The key to getting listed and having a high product ranking is not necessarily paying high commissions, but rather providing products that are relevant - in Yahoos judgment - to what customers are asking for.
The order in which those products are listed will be based primarily on popularity; meaning products most often clicked on by other buyers will get listed first. But no more will consumers be limited by how Yahoo wants to rank offerings. They will be able to click on price features that allow them to rank offerings by the lowest price or limit the search to products within a certain price range.
AOL
AOL has a shopping area accessible within the AOL community and to those who shop from AOL.com. Cost-per-click are based on industry category and negotiated with the AOL sales team.
MSN
MSN Shopping has an internal shopping comparison engine where tax and shipping policies are displayed along with the merchants logo. Search results display based on relevance.
Getting Started With Comparison Shopping
Most shopping comparison engines accept product information from merchants through a daily data feed in a variety of formats or by crawling the web and picking up information off web sites. Each shopping comparison site accepts data feeds in a slightly different format, uses a slightly different naming convention and specification for its data feed format but they typically include URL, click-through URL, title, description, body copy and keywords.
One of the most important factors in getting results in shopping search is optimizing the data feed before it is uploaded. This typically includes writing product titles and descriptions using keywords. With proper optimization, your products will show up under related terms and you increase the odds that your products are being listed at the top of the search results.
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Advanced Media Productions, Inc., 251 West Central St., Natick, MA 01760, USA
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The contents of the Internet Marketing and e-Business Review do not necessarily reflect the opinions of Advanced Media Productions, Inc. Advanced Media Productions, Inc. makes no warranties, either expressed or implied, about the truth or accuracy of the contents of Internet Marketing and e-Business Review.
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