As CEO of an e-commerce company that owns and operates 20 comparison shopping websites globally, I spend each day working with my team to differentiate our offerings, attract new shoppers, and provide real value to our merchant customers.
I follow in great detail the many changes that are occurring in the industry, and read with interest the various reports and commentary describing the future of the comparison shopping engine (CSE) space. I’ve even contributed to some of that commentary myself. Much of the commentary on what is happening in the comparison shopping world makes for good reading and conversation, but is it accurate?
What is really going on here? What is the state of comparison shopping in the retail industry, and where is it headed?
First, shoppers are comparing products and prices with an unmatched historical vigor! We estimate that approximately $1.5B in merchandise (in the U.S.) is being purchased through the use of comparison shopping engines, and even more importantly, roughly that same amount is being purchased using the “hunt and peck” algorithm of shoppers who are comparing by going from site to site: our studies show that 60% of comparison shoppers go to six or more sites before making a purchase.
Furthermore, in 2012, total e-commerce sales topped $1 trillion for the first time. That number continues to grow, and with it, the number of attributed and non-attributed comparison shoppers is also growing. Meanwhile, Google has become the predominant force in comparison shopping. Last year alone, CSEs, including Google Shopping, saw a 56% increase in user traffic.
So, the comparison shopping industry is far from dead – it’s actually vibrant. But it is in the midst of a transformation that is stunningly large and changing everything about the landscape of the traditional participants (CSEs) in the sector.
Where is the industry headed? At Wize Commerce, we believe what is happening is a major shift towards an uncompromising alignment with consumer needs, coupled with a greatly evolved technology landscape that is mobile-first, with products and prices changing in real-time, and where social search is the hot-hot thing on the horizon.
Interestingly, the largest sites that shoppers would call out when asked about “comparison shopping sites” are not even comparison shopping sites. In theory then, the challenge for companies like ours should be super simple – because we’re competing for the hearts of consumers who are going to the wrong place for what they really seek!
So how do we better align with customer needs in the CSE industry? There are an infinite number of possibilities, but simply put – innovation is absolutely the answer. And that innovation must focus on the multiple dimensions that will help shoppers easily and confidently find the right products based on the options they care most about, dimensions like delivery and return reliability, product specifications and review depth, product quality and vendor quality – and most importantly in a country that used 2.9 billion coupons last year, price.
It’s remarkable that the companies most known for comparison shopping information are not comparison shopping companies. It’s even more glaring that there is no single CSE that is seen as the gold standard for the industry in the same way that Kayak has become synonymous with comparison shopping in travel. Kayak, to be sure, has aligned itself to completely satisfy the needs of online travel customers, and they built a brand around this fact.
Some would argue it’s too late for a CSE to do the same. But my experience across several industries suggests that a sector with a global scope that generates billions in revenue can support a brand, or more than one, to serve that market’s needs. The fact that millions of shoppers are scouring multiple sites every day to make sure their purchase is the right one for them is proof enough.
About six months ago, we quietly launched Price Machine, for the price-conscious shopper in all of us. In today’s retail environment, prices change constantly. The biggest retailers don’t always have the best price, multiple vendors often sell the same product at different prices, and the biggest comparison shopping sites – those seen as leaders in the industry – are very much influenced by their advertising models.
At its core, Price Machine pulls back the curtain on the whirl of prices and price changes that can very easily overwhelm online shoppers. And it does so in a way that’s entirely neutral – there’s no bias towards particular merchants. It’s still in beta mode, but it’s already a fast growing site and that is an indication we’re doing something right for a big class of consumers.
Price Machine is working, but it’s just one example of the innovation and opportunity that lies ahead in this sector. There will undoubtedly be additional changes as other participants and new entrants innovate in the months and years ahead.
A changing industry, yes. “Underserved” consumers, yes. “Dead,” no. This is simply too huge a market for anything but upside to be ahead for those who innovate in the interest of the consumers and merchants who serve them.