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Salesforce Commerce Solution Guide

An Online Bargain, Right Under Our Noses

By Paul A. Greenberg
May 17, 2001 5:03 PM PT

Most consumers, when faced with the task of comparison shopping for a desired item, do not have time to run all over town looking to save a few dollars.

An Online Bargain, Right Under Our Noses

Still, saving money is important to most consumers, and that's where the Internet was supposed to fill the gap. Where real-world shoppers feel a shortage of time and energy, e-shoppers are supposed to get all of their price checks and product searches completed with a few clicks.

Not only are e-shoppers able to sign on and purchase from the comfort of their own homes, but they have access to comparison shopping sites or "shopping bots" that help them instantly peruse the Web and find the best price for each desired item.

Unfortunately, Internet shopping bots are having a tough time fulfilling their early promise.

No No, Mr. Botto

First of all, according to varying estimates, only 4 to 6 percent of e-shoppers have used the shopping bots.

Some shoppers appear to be skeptical of anything that could really be that easy, while others let their egos get in the way, thinking that they can find the best bargains on their own.

I beg to disagree. I have used comparison sites a number of times with great success, and although that may put me in a minority segment of online consumers, I'll plan to keep on using them.

Make a Deal

For example, I recently shopped online for a Palm IIIc, using MySimon's price-comparison feature offered me a list of about 30 retailers featuring the Palm I wanted -- with prices ranging from US$252.00 to $399.00. In addition, each Internet retailer was rated according to its fulfillment and reliability record.

Within minutes, I ordered the Palm that I wanted from a West Coast retailer that I had never heard of. However, it had a high satisfaction rating from MySimon.

The next morning the retailer called me to verify the order and three days later I received my new Palm. Nothing could have been easier. And even with the shipping cost factored in, I spent less than I would have at a local retailer.

No Free Lunch

So why are comparison sites having such an uphill struggle to gain customer attention and confidence? It may have something to do with the adage, "there's no such thing as a free lunch."

In other words, online shoppers might think that the service that comparison sites offer is too good to be true. People generally expect that they will have to ante up for anything that makes life easier.

That very principle -- plus the high-level of name recognition -- may explain the success of Consumer Reports Online. While not strictly a comparison shopping site, it is a site that helps consumers determine the best value for their money. Consumer Reports Online said that by the end of the first quarter of this year, it had more than half a million subscribers paying approximately $24 a year each.

Cash Poor

Meanwhile, for the rest of the comparison sites to survive, they will have to become even more diligent in their effort to attract more consumers.

Originally, some hoped to make a killing by charging a small percentage earned on each sale (about 4 percent). Other revenue comes to the sites in the form of advertising and affiliate charges for the Web retailers featured on their sites.

With sales not as brisk as expected and advertising revenues a bit less than desired, some comparison sites have gone back to the drawing board to reassess their business strategy. Still, most agree they are not yet victims of the dot-com shakeout. Comparision sites probably have a future on the Net because cost is still a major factor for most e-shoppers making purchase decisions.

Variety Works

What may ultimately separate the comparison sites that thrive from those just passing through the pioneer days of e-commerce is a variety of product offerings.

Think of the best bots or comparision sites as you would a well-managed department store. Except that in this department store, the same item is featured in a range of prices. It's one-stop shopping with a twist. That's an angle that may capture the interest of a larger group of online shoppers, if marketed properly.

Shopping bots, like anything else online, are in a maturation process. Those that conduct themselves admirably and extend themselves mightily for customer acquisition are likely to grow up just fine.

What do you think? Let's talk about it.

Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.

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