Comparison Shopping Engine Strategies

$700mm Cyber Monday?

ComScore published some data points which are relevant for merchants and CSEs alike:

• $9.3 billion spent online from November 1 through 23, a record and 17 percent higher than the $8.1 billion spent online last year
• Online sales on Thanksgiving Day were up 29 percent, while Black Friday sales were up 22 percent from last year
• Online spending is forecast to exceed $29.5 billion, a record amount but slower growth than previous years at 20 percent -- which brought in $23.6 billion -- and slowing to 5 percent growth
• From January through October 2007, buyers spent $93.6 billion in online retail stores
• People shop online mainly for the convenience factor (81 percent said they wanted to be able to shop at any time) and 77 percent said they did it to save time
• Almost 3/4 of online retailers planned Cyber Monday promotions, almost 30 percent more than the 42 percent that did so last year
• Shoppers were expected to spend $700mm yesterday, up from $608mm last year!
• The biggest shopping day is still yet to come in mid-December!
• Yahoo! Stores, Sears, Circuit City and Lowe's sites were overloaded yesterday...so make sure you've got your servers hotrodded out
• Shipping incentives and deep discounts were common incentives, with Macy's offering the lowest threshold ever for free shipping at $75

And some extra goodness from Shop.org:

• 72mm consumers were estimated to have shopped online yesterday, up from 61mm and 59mm in 2006 and 2005, respectively
• 55 percent of office workers with Internet access did their shopping at work

Written by Scott Hurff -- scott.hurff at channeladvisor

Happy CyberMonday!!!

WOOOOO!  This is the time of year that we as Internet Marketers spend, well, the rest of the year preparing for and it's time to see what comes of all that effort.

There are two events I wanted to invite readers to:

1. I'm on a conference call with Wall St. Internet analyst, Bob Peck @ Bear Stearns tomorrow@2:30pm ET to go over our CyberMonday results.  We'll be talking a LOT about CSEs.  Details are: Dial In: 1-800-683-1535 (US); +1-973-633-6740 (outside US); Passcode: 9494579,  Replay available thru 12/04/07
2. I'll be presenting with Brian Smith and someone from Hitwise at SES next week in Chicago on CSEs and look forward to seeing some of you there.  Drop me a line (scot at channeladvisor.com) if you'd like to connect.  The session is 12/4 at 10am-ish.

I hope you're able to participate in one of those events.

Back to CyberMonday - everything is pointing to a strong Q, we had news releases with some positive trends from  shopping.com/eBay and comscore:

• eBay sent out a very positive release about Black Friday here.  This is one of the first times I've seen them really favor shopping.com over PayPal and eBay in a release like this - could this be the sign of changes at eBay?
• Comscore - Comscore announced through a variety of media outlets that Black Friday online sales were up 22% from last year (note this datapoint explicitly did not count auctions/eBay interestingly enough).

Hurff and I will be posting regular holiday sales updates so be sure to subscribe to the blog if you haven't already.

Shopzilla on the block? And PageRank PayPerPost penalties

We've heard rumors from well-placed sources that Shopzilla may be on the block and is being shopped around to private equity firms and companies for a possible sale or leveraged buyout.

If true, a sale wouldn't exactly come as a surprise as the CSE has been struggling financially, was recently spun out as part of the new Scripps Interactive and since at least Q2 has been publicly acknowledged by the company to be underperforming.

And in other news, a blogger was recently contacted by Shopzilla to remove a PayPerPost review about the CSE where he was initially paid $10 for the review, only to be offered $100 to remove the post.  Other bloggers reported similar situations.

This is probably a combination of 1) at attempt to take all measures possible to improve PageRank (Google is penalizing PayPerPost links) and 2) improve public relations by eliminating paid reviews.

I'd love some more information on these topics -- write me at scott.hurff at channeladvisor if you have anything else I can add here.

Interview with ThisNext CEO Gordon Gould

I spoke at length with Gordon Gould this week, CEO of ThisNext, to talk about where his company is headed, why the space is heating up and the principles behind the company.

Gordon is an impressive individual -- not to be confused with the inventor of the laser -- having started and sold Blogsmith, the engine powering Weblogs, Inc. and Upoc, the longest-standing mobile social network.  And he was President and COO of the Silicon Valley Reporter with Jason Calacanis during the first dot com boom.

Interview Summary

• Setting the stage: ThisNext & existing social players
• The Product Graph
• Enabling what market?
• The audience
• Social shopping vs. CSEs + social functions
• Marketing the vision

The Meat
Recently the press has been eating up announcements by Facebook and Google that seek to enable new types of transactional data sharing amongst friends.  The most relevant announcement is Facebook Beacon, which integrates retail sites directly into the social graph already present on Facebook.  How does this affect ThisNext and how is it different?
The core philosophy of people recommending products to each other is right on, but I think the Facebook move is more PR.  There are some truisms on the Internet -- any company that's gotten any scale and traction in a space has only been able to do one thing well.  The best example of this is Google and search monetization -- their other products haven't really taken off in the same way.

One of the basic operating principles in this industry is hyper-competition-- which makes it very difficult for the same organization to start spinning out related businesses in things not core to what they're known to be good at.  In Facebook's case, the opportunity to own the social graph is a tremendous opportunity.  But it's a land grab, and the company has to put all resources against all that.  Everybody else is trying to figure out how to do this and take him down so he doesn't own social graph.  As big as they are, for them to move from being a horizontal platform where people make their home on the Web to getting into more vertical apps is suicide. 

New launches at TheFind

Siva Kumar, CEO of TheFind, reached out to tell us some information about some new features just launched at the product search engine.

Aimed at providing more context for product searches, search results are  now sortable in pretty new and interesting ways --

• Mini-Malls: groups products by the type of store selling them -- department stores, boutiques, marketplaces like eBay and Amazon
• Virtual Shopping Districts: lets you browse products offered by stores on Rodeo Drive and Madison Avenue, for example to get a virtual shopping experience
• Pop-up similar product search: pretty simple but effective way to draw people deeper into the site by recommending complementary or similar products within the mouseover
• Recent search stream: all the mouseovers you look at are now tracked in your browsing history, along with recent searches and saved items.  These are now used for targeting product searches.

Screenshots...get your screenshots here
Mini-malls & virtual shopping districts

Product mouseovers

Recent search stream

Written by Scott Hurff -- scott.hurff at channeladvisor

What Facebook Beacon means to you

While I believe in the value of Facebook as an engine for retailers to push their wares to buyers in new and novel ways, I'm not a member of the FB Hype Machine and I'm approaching this post in as neutral a light as possible.

Because as someone writing about CSE trends and news, I think it's my responsibility to summarize what exactly Facebook Beacon is and how you as a retailer or CSE operator should approach it.

Facebook Beacon: WTH?
Beacon is a system that connects Facebook with outside sites and allows users to share information back to their friends in Facebook about what they did on those sites.

Outside sites decide the most relevant information / actions that their users share back to their networks on Facebook.  Examples include "posting an item for sale, completing a purchase, scoring a high score in an online game or viewing of video." And all this information is voluntary -- each user gets a prompt asking if they want to share what they've done on the third-party site -- but is also used to hone advertising to that user back on the Facebook platform.

So what's the end result?  Your business is promoted in an organic way via someone's social network.  Within Facebook's News Feed, mini-stories are displayed about what your friends did at certain sites. 

It's essentially a way to integrate with Facebook without actually integrating -- in other words, it's a way to get involved on the site without actually building an app for the site.

So what's the point?
I continue to believe that Facebook (and now Google's OpenSocial efforts) is an essential new touchpoint for online retailers and providers, and should be approached as a new marketing channel.  While standards continue to emerge and technologies change, retailers can take advantage of this channel without spending a lot of cash.  It takes some ingenuity and time to be successful in this environment but shouldn't be overlooked.

To-dos
If you agree with me, here are some things you might do:

• Sign up to be a Facebook Beacon partner.  There are already 44 participants -- including eBay, Fandango, Pronto, Travelocity, Overstock, Zappos, Yelp, Blockbuster, Bluefly, The Knot and more.  While the focus right now seems to be on large retailers / properties, it's worth exploring what you'll need to do to get involved.  If you're a large retailer, this is a no-brainer.  And if you're a CSE / social shopping site, this is a no-brainer, as well -- TheFind, ThisNext, Shop.com, Shopzilla, Kaboodle and more seem like good matches to me.
• Talk with participating CSEs / marketplaces to offer more granular stories.  If you're a retailer but not of the scope of Zappos or Bluefly, you should be talking to eBay / Overstock / Shopping.com / Pronto to request that your store be mentioned in any feed item pushed back to Facebook. 
• Keep learning and reading.  I recommend reading  Facebook's Blog, researching the Business Solutions page and diving into the Developers site.

Written by Scott Hurff -- scott.hurff at channeladvisorrr

Remainders: Become.com's new design, Pronto buying guides, more love for TheFind + PayPal, StreetPrices improves comparison shopping

1. Become.com launches new site design
2. TheFind powers PayPal's holiday campaign site
3. Pronto launches buying guides
4. StreetPrices integrates nifty notes feature

Become.com launches new site design: with the goal of  "improved integration between comparison shopping, Web search and user-generated content" Become.com launched a new interface on 11/6.  The site doesn't quite seem unified yet, and I think that the new logo is a step backwards.  Furthermore, the wedding of shopping, search and "UGC" doesn't seem quite as tight as it should be -- reviews and ratings seem detached from the products themselves and it's unclear what the value of certain features are ("user lists," "my pages," etc.). 

TheFind powering PayPal's holiday campaign site: TheFind will power a PayPal holiday-themed site for PayPal merchants at paypal.com/holiday beginning November 19.

Pronto launches buying guides: aimed to help people figure out what to buy in time for the holiday season, with breakdowns of 1) the best product in the category 2) five key points you should remember when shopping in the category 3) most talked about products 4) what you should expect to spend and 5) expert advice.  Also embedded in the release is info that Pronto attracts 5.2mm uniques / month and grew 3100% YOY.

StreetPrices integrates notes feature: a nice, simple feature well-implemented -- let visitors leave notes for themselves about each product.  Check it out.

Written by Scott Hurff - scott.hurff at channeladvisor

CSEs up 56% year-over-year

Baby boomers searching for electronics helped account for a 56 percent increase over CSE traffic compared to the same period last year.  CSEs saw a 38 percent increased amongst baby boomers themselves.

Good news for CSEs -- especially:

• Shopzilla -- up 58 percent (which provides a "WTH?" moment...why is Shopzilla struggling so much on the earnings front? Could be that they aren't effectively managing search engine ad arbitrage.)
• NexTag -- up 48 percent
• Yahoo! Shopping -- up 46 percent

So you want market share numbers? Here are the top three:

1. Yahoo! Shopping -- 20 percent of visits (up 44 percent)
2. Smarter.com -- 15 percent of visits
3. Bizrate -- 14 percent of visits

Not surprisingly, Amazon, eBay, Target, Overstock, Wal-Mart and JCPenney got the lion's share of downstream traffic.

And Google referred 20 percent of visits to CSEs, while Yahoo wasn't far behind at 14 percent. 

Most of these referrals were for " laptop computers, Nintendo Wii, LCD TV, digital cameras, iPods, and Xbox360s," which were the most popular product searches conducted.

Hitwise published the data.

Written by Scott Hurff

ThisNext now gauges shopper influence

ThisNext now measures the "shopping influence" of each user on its site based upon content contributed, how other users act on it, and to what degree your contributions matter relative to others.

The company is providing Gordon Gould's profile, ThisNext co-founder and CEO, as an example of how this actually works.  Check it out here.

Think of it as physically characterizing the "mavens" of shopping (to borrow a term from Malcolm Gladwell -- for you non-Tipping Point fans out there, mavens are "are knowledgeable people. While most consumers wouldn't know if a product were priced above the market rate by, say, ten per cent, mavens would."

As a result, it's extremely easy to identify the most influential users in the ThisNext world, especially within reach relevant, respective community.  For example, Gordon appears as #1 in the "healthy" subcommunity, while "abh75" shows up at #3 in "gift guide."  Also note geographical popularity -- it's easy to find out which parts of the world like your style. 

So what's the point?  This is the first material effort I've seen to go a step beyond basic statistics and quantify hubs of influence in shopping circles.  I think it's a valuable exercise and one that could empower marketing efforts in some pretty exciting ways.

Time for your $.02: an evolution in how we understand shopping habits and influence, or just a clever PR move?

At least if it's the latter, it worked on me...

Written by Scott Hurff -- scott.hurff at channeladvisor

Get the most out of your CSE efforts

As click costs rise, the number of comparison shopping engines grow and existing players continue to refine their feed specs, category offerings and site features, where should you direct your attention as a retailer?

InternetRetailer's got a great write-up, breaking down how to build a winning CSE strategy in 12 steps.  Bonus: quotes from Mr Wingo himself and eBags, a ChannelAdvisor client.

Some choice excerpts:

While platforms such as ChannelAdvisor’s provide one answer, merchants who have their hands full keeping on top of feeds with or without outside help might easily be tempted to ignore new feed specs that an engine labels as “optional.” But they do so at their own risk. “Any new thing the engines do, they call optional because they want everything to be backwards-compatible,” Wingo says. But, imagine that a new option is showing shoppers shipping costs by ZIP code. If a consumer enters a ZIP code and wants to see shipping costs, but the retailer has opted out of providing that information, the retailer won’t show up in those results.

As an example, Wingo says one of the shopping engines producing the highest conversion rates for merchants using ChannelAdvisor’s services is a very small comparison engine for hand tools on BobVila.com. “It is such a great match between audience and product set that the conversion rates are huge,” he says. “It’s not a top-25 shopping engine, but it drives more qualified leads and sales than you would on a PriceGrabber or one of the others.”

It’s just one of the many options that merchants need to keep in view in understanding that comparison shopping engines aren’t a set-it-and-forget-it proposition, and in seeking to keep their programs matched up with the fast-changing environment. “Without changing your strategy, if you look at it on the surface, comparison shopping engines are getting more expensive, just like paid search,” says Wingo. “We work with retailers to tweak their strategy and find ways to fight that inflation. There is a lot you can do now with optimization.”

Written by Scott Hurff -- scott.hurff at channeladvisor