GUEST COMMENT Price comparison: internet retailing’s forgotten gem?
Haggling has been an integral part of retail since the marketplaces of ancient times, so it’s no surprise that following their arrival several years ago, price comparison websites quickly became hot digital property with eager consumers flocking to them in the hope of finding the best deal. Consumer instinct for ‘shopping around’ is, evidently, still going strong. In the present day, price comparison has become such an established and permanent fixture of the ecommerce landscape that it almost seems to fade into the background – consumers are so accustomed to the presence of these sites that certain types of purchase, such as retail shopping, car or home insurance or searching for credit card deals, are virtually unimaginable without their assistance. But as user traffic continues its steady march, are today’s retailers underestimating the potential of price comparison sites?
To answer this question, we need to look past the current big-budget advertising campaigns and get back to basics, by examining the core advantages of using price comparison sites for both retailer and customer. Although many industry experts had predicted that price comparison would see a collapse in turnover following the introduction of the paid version of Google Shopping, we have seen no signs that investment is falling, which suggests that although emerging channels are increasingly popular, they nevertheless occupy a different space than price comparison – with the latter’s value still evident to retailers.
The perks for consumers are straightforward – with the huge number of websites out there, the ability to have a range of products and prices handily displayed side-by-side is an invaluable resource that cuts down on time, stress and often overwhelming decision-making involved in hunting for a bargain online. For retailers, these portals offer a way of getting their products and brands in front of the right customers, often for the first time; a recent Become Europe study
found that price comparison websites were responsible for bringing in significant numbers of sales from new customers who had previously had no relationship with the brand. Today’s retailers stand to gain more than just new business – having a presence on price comparison sites lends an important element of trust and credibility from the consumer’s point of view, due to the rigorous background policy in operation by the majority of providers. This can ultimately affect a sale, as customers who feel insecure about the authenticity of a merchant have very little reason to follow through with a purchase.
The benefits of using price comparison websites are different for small and large retailers - bigger retailers tend to view price comparison as a reliable way to gain new leads and extensive exposure via large ad networks. It is less about increasing their popularity, and more about converting sales in high volumes. Conversely, smaller retailers tend to use the channel to achieve greater reach and bolster consumer trust, but they are also slightly hindered because they are competing with bigger and better-known brand names on the same pages. While it’s no secret that many consumers will automatically select a brand they are more familiar with when faced with the choice, it is also true that if product data feeds are set up correctly and they are able to compete with more established brands on price, smaller retailers have as good a chance as any to succeed via this channel. For example, being listed above a retailer like Argos, Amazon or Debenhams can give smaller retailers some of the best possible exposure to a new audience.
In order to remain competitive with these larger retailers, however, all merchants must pay special attention to how they set up and maintain their data feeds – the advent of Google Shopping has meant that it is all the more important to have up-to-date delivery and stock information as well as eye-catching product imagery in order to hook customers’ attention – the consequences of neglecting this aspect can be serious, as customers are unlikely to give second chances to retailers who have ‘led them astray’ with incorrect information in the past, and price comparison providers also tend to remove problematic feeds completely, leading to significant traffic losses. Ratings and reviews from other customers are also an extremely valuable commodity, as nothing bolsters confidence like the approval of peers. Ratings and reviews become even more valuable by virtue of the fact that it can be difficult to get enough of them to make a valid statement about a product – rewards and initiative schemes go some way to tackling this problem.
Today’s online playing field looks significantly different, and traditional price comparison providers have had to work hard to adapt to the increase in competition and alternatives to cost-per-click publishing, particularly in markets like the UK where online evolution moves at a much faster pace than elsewhere in Europe. The mass uptake of mobile devices among consumers has meant that many price comparison providers are now shifting their focus towards allowing their merchants to work across mobile-ready channels. Although this marks a clear leap forward in terms of harnessing consumer ‘showrooming’ for the retailers’ advantage, instead of only comparing online prices, they are now allowing customers to look at comparisons of physical products instore too, opening up new traffic streams and high quality leads to the merchants and partners they work with.
As the popularity of online shopping has skyrocketed, so has the need for retailers to analyse what’s working and what isn’t – as a result, another recently-emerged industry challenge is the ‘last cookie wins’ debate. The majority of marketers use last-click attribution to evaluate the progress of performance campaigns, but this can be an over simplistic way of measuring success, and can mean that price comparison providers – which drive customers to retailers’ sites and, as such, play a vital role in assisting the final sale – are forgotten about, while their perceived importance in generating sales is diminished as a result. With so many players involved in the customer journey, there is essentially no clear ‘A to B’, which makes it much more difficult to pinpoint exactly where responsibility for each sale lies. This is more of a problem for cost-per-action pricing models, and less so for cost-per-click models, but initiatives are already in place to tackle this issue, like affiliates incorporating attribution models so that all parties involved get a fair pay-out. From a retailer standpoint, the best option is to spread a shop out over many different channels, as this will result in exposure that converts from multiple sources. Listing with networks, such as Become’s Product Ad Network, means stock will be seen across many different partners.
The new generation of price comparison providers are not waiting passively while other players pass them by – instead, they are actively developing new ways to use existing technologies to work with their ad-networks to stay competitive, while generating continued exposure for their merchants. With the large-scale migration of both consumers and retailers towards social media, many price comparison providers are now looking to partner with social-based start-ups and publishers in order to become a ‘one-stop-shop’ for their merchants; the aim of this will be to expose them to consumers across multiple traffic streams, including social sites, using the expertise of these new partners.
In many ways, the industry is moving further away from traditional price comparison. Become Europe is in step with this trend, finding new ways to deliver the user to purchase, while moving closer to the joined-up retail utopia of the future. Michael Rausch is general manager for Europe and North America at Become Europe