Report: Portals To Evolve Into 'E-Commerce Brokers'

The future of e-commerce will include beefed-up portals, dubbed "e-commerce brokers," that will offer more than a list of links and a passive handoff to online retailers, according to a report released Thursday by Forrester Research.

The report, "eCommerce Brokers Arrive," predicted an imminent shakeout of shopping intermediaries -- sites that aggregate Web merchant listings. The remaining intermediaries will evolve to take a more active role in online sales.

"Retailers are too complacent, wasting time and money on partnerships with comparison-shopping and niche content sites that have no future," said Forrester analyst Carrie A. Johnson. "There is a disconnect between what shoppers want and what retailers and intermediary sites deliver. Consumers want products, not content."

Skipping the Middleman

Sophisticated online shoppers rarely bother with intermediary sites, such as mySimon.com, that promise to help them find what they want, according to Forrester. Instead, they point their mouse directly to sites they know and trust: retailers and manufacturers.

A survey released last month by Consumer Reports backs up Forrester's conclusion that most consumers do not find portal sites useful. The venerable research organization rated various shopping portals, including Yahoo!, AltaVista, Shop@AOL, and Excite@Home's Shopping. After the numbers were tallied, only Yahoo! rated above average, scoring 4 out of 5 on Consumer Reports' "e-Ratings" scale. The others were all deemed too confusing and poorly organized to encourage Web surfers to spend.

Dance with the Best

As a result, retailers hoping to profit from portal affiliations need to choose their partners wisely, according to Forrester.

"They must pick partners that have the scale, service and speed needed to innovate for consumers," Johnson said. "Comparison-shopping engines, product-review sites and portal wannabes don't have what it takes, but affiliate programs and major portals like AOL, MSN and Yahoo! do."

Coming Evolution

However, those intermediaries that do survive the shakeout will evolve into true partners for both e-tailers and customers. Forrester said that by 2005, e-commerce brokers will provide a selling platform for retailers by "enabling merchants to reach, convert and provide services to more customers."

These brokers will aid e-tailers by mining user data from across their network of sites, to help e-tailers anticipate customer behavior. Forrester said that this would give retailers a "broader view of future customer behavior than they can realize on their own."

Consumer Benefits

E-tailers are not the only ones that will benefit from these beefed up portals, according to Forrester. The Cambridge, Massachusetts-based research firm said that e-commerce brokers would provide consumers with tools like comparison-shopping engines, merchant ratings and online wallets that are accepted at partner merchants.

For the report, Forrester interviewed 50 retailers about their relationships with portals, comparison-shopping engines, niche content sites, affiliate programs and networks that run affiliate programs.