Whatever Happened To E-Commerce Robots?

Price comparison sites like BizRate.com, DealTime.com and Price.com can indeed save shoppers time and money, especially in certain product categories. But as long as price is the primary metric for bots' comparisons, their value will be limited, analysts agreed.

"For consumers who buy on the Internet, the biggest poverty is of time, not of money," Gartner research director David Schehr told the E-Commerce Times.

Dealer's Choice

Shopping bot providers like New York City-based DealTime.com use Internet spiders to comb online merchant inventories, so shoppers can benchmark prices from a single location.

"Our mission is to help shoppers zero in on the product they want to buy and determine which merchant they want to buy it from, based on price, reputation, product availability and service," DealTime.com spokesperson Deborah Sack told the E-Commerce Times.

But shopping bots have yet to hook shoppers en masse, despite their veteran status in the e-commerce arena.

"There is indeed a place for shopping bots," Jupiter Media Metrix analyst Ken Cassar said in an interview with the E-Commerce Times. "The question is whether it is a market for horizontal players or vertical players."

Adoption Apathy

In December 2001, just 10 percent of the online population used a shopping bot, according to Jupiter Media Metrix. In the same vein, Gartner analysts recently reported that buyers use bots to find shopping sites just 3 percent of the time.

While most bots cut horizontally across multiple product categories, analysts said bots are most useful in certain high-end product categories where potential savings are highest.

"Most of what people buy online is low priced -- $US5 to $50 -- so they do not spend much time to save 50 cents," Schehr said. "Consumers are more focused on convenience than on price."

Price Rut

Because a multitude of factors drive most purchases, Schehr suggested that bots should offer more comparison criteria.

A consumer shopping for a shirt, for example, could search and sort according to color, size, material and style, in addition to price.

While parametric searches like this would be ideal, Cassar said, they would present unique challenges of scope and scalability.

"The bots would need to inherently understand product categories," Cassar noted. "The approach and attributes to help consumers find the right product can differ by each customer and each product."

For the Record

That said, many bot providers are beefing up content to complement their price data.

For instance, Los Angeles-based BizRate.com -- which drew more than 6.5 million unique visitors in January, according to Jupiter Media Metrix -- aggregates customer feedback to generate merchant ratings based on quality, delivery and other customer service metrics.

Electronics shopping bot site Price.com offers a similar merchant rating system.

Still, most of this content is merchant-based rather than product-based, limiting the types of parametric searches common on retailers' own sites.

Both merchant and product data will be critical for shopping bots' long-term viability, Cassar suggested.

Niche Knock-Offs

For higher-priced items like computers, digital cameras or stereo equipment, comparison shopping can pay off, according to analysts.

"On the most popular electronics products, the savings can be as much as 50 percent and run into the hundreds of dollars," DealTime's Sack said.

Bot providers prefer consumers to realize such savings online, since they derive referral revenue from the merchants listed on their sites.

Brick-and-Dollars

"Consumers who come to BizRate.com are purposeful shoppers," BizRate.com spokesperson Leslie Barry told the E-Commerce Times. "Once they research with us, they link to the retailer they want to buy from."

Ironically, in high-end product categories, consumers often research online and purchase through offline channels, Cassar noted.

"For every dollar spent online, another $5.50 is spent offline as a result of online research," he added. "Bots are in the bull's-eye of this phenomenon."

Red Carpet Retail

Regardless of whether content-rich product searches will drive more bot users to purchase online, these shoppers represent a new, lucrative customer base for retailers, analysts said.

"The appeal of bots to merchants is that they offer low-cost transactions," said Cassar. "Bots bring to their doorsteps customers that they might not otherwise have sold to."

For its part, DealTime scours more than 1,000 merchants, including Kodak (NYSE: EK), Wal-Mart (NYSE: WMT), REI, Crutchfield, Amazon (Nasdaq: AMZN) and Sam Goody.

"Customer acquisition cost is a large proportion of the online merchant's cost structure, and shopping search engines provide a [low-cost] customer acquisition tool," Sack said.

The only risk to retailers, Cassar noted, is that they could commoditize their brands or products by agreeing to appear in comparison site listings.

But this risk is mitigated by tangible opportunity for incremental new business, he said.