Comparison Shopping Engine Strategies

Comparison Shopping Overview

Comparison Shopping Engines (CSEs) are product marketing websites that display aggregated product offerings across multiple retailers. Examples include Shopping.com, Nextag.com, Shopzilla.com and PriceGrabber.com. Consumers often visit CSEs to find the most attractive offer on a product they have already determined they want to purchase. However, some consumers will also use CSEs as part of their product discovery and research process. Once on the CSE, the consumer is able to evaluate various offers from multiple retailers in one place, saving time while finding the best value.

CSE traffic is important to retailers because it represents a sizable set of internet users at some point in the buying cycle, and therefore in the retailer’s target audience. Most CSEs (including all the examples above) charge retailers on a per click basis. Every time a consumer clicks on the offer of a certain retailer, that retailer pays the CSE. The actual amount charged for each click varies by category and by CSE. On many of those CSEs that have this cost-per-click (CPC) pricing model, the retailer has the ability to increase the rate they are willing to pay for each click in exchange for increased visibility on the CSE. There are a few CSEs that are free, two such sites are Google Product Search and TheFind.com. In addition, other CSEs, including Microsoft Live Cash Back, charge not on a cost per click basis but on a cost per acquisition basis, meaning it collects a percentage of the sale price when a consumer makes a purchase.

In order for products to appear on CSEs, retailers must send a product data feed to each CSE on which they choose to advertise. The exact layout of the data feed varies by CSE, but all CSEs require a product price, title, description, image URL and action URL that links to the product page on the retailer’s website. The CSE processes the data from the feed into their system and displays the product information for consumers to search or browse through. When the consumer finds what they are looking for, they click on that offer and are delivered through the action URL to the retailer’s website.

Happy Holidays from ChannelAdvisor - The Adventures of Tank Stikman...

We just published our holiday Flash animation, introducing Tank and his adventures the last year.  You can see it in original flash here.

Or hit play below on the embedded youtube version:

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

The Freshest Shopping Engine

Editor's Note: This post is written by Jeff "Big Slick" Buechler, Marketing Maverick, Host of http://onlinesaleschannels.wordpress.com and ChannelAdvisor Employee.

 
Everyone is looking for the next killer app and a lot of people have spent a lot of money trying to monetize Web 2.0. Well I have the answer and as Paris Hilton would say, it’s hot: a celebrity endorsed shopping engine where select products are given the star’s personal seal of approval.

What do Britney Spears, Paris Hilton, Jessica Simpson and Lindsay Lohan all have in common? Well, other than the obvious? They all have blogs, they are all paid to endorse various products and they could all be pitchmen on my comparison shopping engine!.On my shopping engine, tentatively named Babezilla or Starazon… how about MovieBizRate (OK maybe the name needs some work) celebrities would lend their likeness or a brief note about why they like, or use a particular product.

Think about the tie-ins! Britney seen in a new wig? That picture of her on her blog would link to my site where her many adoring fans could go ahead and buy the same wig for themselves (I’m look at you Chris Crocker). Did Jessica just win an Oscar for her role in Dukes of Hazzard and you absolutely love the dress she wore to the after party? Find it here!

Movies would be dying to have promotional tie ins. The paparazzi could provide colorful insight into the events around the occasion.

 
Plus it opens up all new industries that had never considered comparison shopping engines before. A few that come immediately to mind: rehab clinics (buy a stay where Lindsay stayed the second time around!), body guard services, designer water (replenish your body with what Courtney Love uses after a hard night of partying), the list is nearly endless.

This idea opens up secondary markets too. Can’t afford designer items? Well, I have an alternative site for you: B-Listers.com This is where once famous celebrities can go to milk the last mileage out of their careers. Emmanuel Lewis, Tonya Harding, Todd Briges…think of anyone on the current reality TV shows. This is where some like me would shop for a uniform like Gary Coleman wears. I could also buy Danny Bonaduce endorsed brand of boxing gloves, just like he used on Celebrity Boxing!

These items can all be found on Celeb-Grabber…OK, I’ll keep working on the name.

Google Slap targeting CSEs?

Good analysis on the PPC Super Affiliate blog re: Google's quality score tweaks for landing pages.  Of note for CSEs (thanks Josh):

The following types of websites are likely to merit low landing page quality scores and may be difficult to advertise affordably. In addition, it’s important for advertisers of these types of websites to adhere to our landing page quality guidelines regarding unique content.

•     eBook sites that show frequent ads or install malware
•     ‘Get rich quick’ sites
•     Comparison shopping sites

As Josh points out, bad timing for CSEs since the holidays are coming up.  We may see a search engine ad dollar shift to Yahoo and MSN as a result if CSEs have to pay a degree higher on Google -- I wonder what the economics will look like. 

Surface questions to consider:
Are other engines that much cheaper?  What kind of ad volume will CSEs have to churn in order to get the same amount of qualified traffic? 

Depending on the economics, I could see CSEs breaking even or having to pay a little more on other engines to get the same amount of qualified traffic, depending on how Google QS affects their ad buys (% increase x volume).

Scott Hurff wrote this -- scott.hurff at channeladvisor

ChannelAdvisor Catalyst Wrap-up...

Wow, what a week.  We had over 400 customers, partners and prospects down at Pinehurst, NC at our annual Catalyst conference.  CSEs were top of mind and we had a very strong showing from the folks at Shopping.com, Google Base (aka Google Product Search), Pricegrabber, Pronto, Jellyfish, TheFind and many others.   

From a CSE standpoint, the highlight was a presentation+panel run by Brian Smith@ComparisonEngines featuring:

• Cynthia Kwon from Google Base/Froogle/Product Search
• Trent Scoffield from Shopping.com
• Nathan Decker from evogear
• Lisa Bari from art.com

There were good discussions around the CSEs trends that retailers are seeing, etc.  Things got a little heated when what I call the CSE ROI death spiral was discussed.   The paradox goes as follows:

• Most CSEs only allow you to manage ROI by removing under-performing SKUs from the index.
• This results in a bad consumer experience because it reduces the selection
• This can cause the ROI of performing SKUs to under-perform (now go to the first bullet and you have a death spiral).

The end result as discussed by the panelists and some other attendees from large > 10k SKU retailers is that the number of sku's being fed to the CSEs diminishes over time with the exception of the holidays where you may refresh for that selling season.

This isn't a problem on Froogle as it's free.  Shopping.com didn't have a great answer for this, but I do suspect their cart trial will give them a CPA option where they can say if CPC isn't cutting the mustard move your products to the CPA/cart part of the marketplace. 

In any case, this issue is the biggest one facing retailers and CSEs today so we'll be spending a lot of time on it here at CSE Strategies in the coming weeks and it's a big focus for ChannelAdvisor from a software/solution standpoint.

Several folks have asked for a copy of my presentation on Ecommerce Trends which you can download here.

Invitation to CSE Strategies readers - CA Catalyst!

If  you are actively involved in the Comparison Shopping Engine industry as a vendor or a retailer, you should seriously consider attending your upcoming Catalyst event.  With over 400 large retailers and all of the major CSEs represented, this is your chance to learn the advanced strategies you'll need to dramatically increase not only CSEs as a channel, but your ROI on CSEs.

Details are here.   We're nearing capacity so make sure you sign up ASAP.  In addition to this session:

                                                                                                                                                                                                                                                                          

he Future  of Comparison Shopping
Moderator:	Brian Smith, Analyst,  ComparisonEngines.com
Panelists:	Cynthia Kwon, Strategic Partner Development, Google                                                              Trent Scoffield, Director, U.S. Sales & Client Services, Shopping.com                                                              Nathan Decker, Senior Manager of eCommerce, Evogear.com                               Lisa Bari, Partner Marketing Manager, Art.com

                        

Comparison Shopping Engines are becoming an integral part of the online consumer shopping experience. It is reported that 75% of all online purchases are made through comparison shopping. Brian will present the state of the comparison shopping world, including information about some of the new comparison shopping engines and some new business models offerings. Brian will also moderate a panel of comparison shopping engines providers and ask what they are doing to help retailers sell more.

There will be  CSE-focused round tables and representatives from all the major CSEs will be there ready to answer your questions. 

Finally, CA will be previewing something we think will change the way you work with CSEs FOREVER!  So you don't want to miss that.... (I'll probably get in trouble for posting this so don't tell anyone).

ChannelAdvisor is a 2007 //CODiE// Finalist!

Every year the Software and Information Industry Association (SIIA) recognizes excellence in software via an award program they call the //CODiE// awards. We just learned today that ChannelAdvisor Merchant was chosen as a finalist in both the Best Business Software Solution and Best eCommerce Solution categories!

You can read all of the details on the program here.

This is admittedly a super-geeky accomplishment, but, heck, as a guy that still sleeps in his Star Wars underoos, this is pretty dang exciting.  I wanted to thank the entire ChannelAdvisor team for all of the hard work that has gone into making Merchant a huge success and most importantly our customers.  Without you, there would be no ChannelAdvisor and of course, no opportunity to be a //CODiE// finalist!