Comparison Shopping Engine Strategies

E-consultancy's CSE Buyer's Guide 2008

The fine team at E-consultancy just published one heck of a comprehensive guide to CSEs for sellers who want to know more about the market, who the players are (profiles of 16 leading engines included) and investigates how new players are trying to differentiate themselves just as the old guard seeks to prevent stagnant growth.

E-Consultancy also predicts that the growth of new social shopping sites will be "significant."

And, despite the specter of a complex and difficult global economic situation, a poll of players in the CSE space reveals that there is little worry of an online purchasing slowdown.

Weighted towards the UK market but relevant for everyone selling or playing in the CSE space, I'd recommend you download and read it.

Bonus: James Scott from ChannelAdvisor's UK office is quoted (pp. 14-17, 29-32).

Go get yourself a read.

by Scott Hurff -- scott.hurff at channeladvisor

HealthPricer wants to own the health space

As more health-related information and access to products moves to online channels, the space will continue to consolidate around existing leaders.

But in one health-related space, there's no clear competition for HealthPricer, a CSE that specializes in offering everything from drugs to vitamins to beauty products and supplements.

The CSE just announced a partnership with Healthline, a health content site, to power an embedded marketplace for health products.  This should drive some welcome traffic -- Healthline's reach is about 2.5mm uniques / month, whereas HealthPricer drives about 50k  /month 150,000 uniques / month (based on HealthPricer company data), based on Compete data.

Versus mainstream CSEs, HealthPricer stacks up well in offering rich health data, relating ingredients across products, and figuring out volume pricing deals to tell you what the best deal is if you buy in bulk.

Overall, I'm impressed with HealthPricer's UI and logic in separating out relevant data to make informed purchasing decisions.  If you're a merchant who sells health products, check them out here.

Watch their DEMO 2008 presentation below:

Written by Scott Hurff -- scott.hurff at channeladvisor

Amazon Product Ads begins rollout

Back in July, I mentioned a job posting over at Amazon about Product Ads, a previously-unknown program having something to do with "a new cost-per-click advertising channel."  Now it looks like this program has rolled out based upon email marketing performed by Amazon, as well as some early examples in Consumer Electronics, Home & Garden, Tools Toys and Kids & Babies categories.

Here's how the flow works:

• Merchant uploads product catalog
• Customers perform searches on Amazon.com, where the merchant's products appear in search results next to Amazon products (also known as "the product ad")
• Customers may click on the product ad, which takes the user to Amazon's product page presentation, which links directly to the merchant's OWN product page
• The merchant is charged on a CPC basis
• The merchant keeps all transaction revenue from the referral, minus CPC costs

Check out an example search here. Notice the "Available at external website" footer label on each "product ad."

So, what does this accomplish? It brings visibility to third-party merchants up one layer into the search results themselves.  Previously, as we all know, merchants could only be seen once a user clicked onto a product page. Now, third-party merchants can compete directly within Amazon's search results, depending on the product and category.

This will probably benefit merchants who sell more unique items, but the data will always tell the truth.

Anyone out there enrolled as a beta in the program?  Talk to me! scott.hurff at channeladvisor dot com

Thanks to Max & Brian for some information.

More social shopping

This article from the La Crosse Tribune sums up the social shopping segment well.  I'd recommend a quick read.

Many users find it utterly addicting, logging on at least daily to see products that other people are looking for or have discovered. These members say the shopping lists their fellow users post are often funky, personal elements of self-expression, as much as that may sound like an overly exalted way of describing what is, after all, consumption.

"We want to create a million mini Oprah Winfreys," said ThisNext CEO Gordon Gould. "Why is she powerful? Because people think she's genuine, she's authentic. She's giving recommendations from the heart. We're (doing that and) scaling that across every product category across the Web."

Scott Hurff

A Merchant's CSE

There have been lots of comments left on this blog about what CSEs do poorly and some ideas for how they should be doing things better.

I want to open the floodgates. 

I want to hear from all of you merchants, CSE execs / employees, e-commerce junkies and anyone else who has ideas for their 'perfect-world' CSE. 

What I want to do is gather your ideas, ideals, feedback and more and structure it in a new post later this week.

Some ideas:

• How would you send, track and manage feeds? Would feeds even exist?
• How would you pay for search placement, if at all?
• How would your perfect-world CSE promote the best merchants? The best deals?
• Would social shopping be a factor?
• What about SEM? How would you like your products promoted on the search engines?
• Email marketing resources
• What would it look like? How would it make users find your products better?
• Which CSE do you think does the best job right now? How could it build on top of that experience?
• Would it be creative like Jellyfish Smack?  What other "game-like" options would it offer?

So, here's the invitation.  Your forum is just a click away.

Comments open!

Written by Scott Hurff -- scott.hurff at channeladvisor

Retrevo is a great example of the niche CSE

When I spoke with Jon Glick of Become.com about the site's latest redesign, he reiterated that the site's mission was to "give people all the information they need to make ideal buying decisions."   In other words, the more product information people have, the more qualified they'll be as merchant referrals.

Retrevo is a niche consumer electronics CSE launched in much the same spirit.  The site aggregates user manuals, user ratings, "expert ratings," forums, blogs, and, of course, shopping referrals. Retrevo has been live for about a year now.

What's unique about Retrevo is that it doesn't stop with simply aggregating relevant material -- it assembles the breadth of information into a usable, standardized, simple product rating called a "Product Snapshot."

Retrevo's Product Snapshot maps your TV, camera, or other search onto a price / feature matrix and places the item in question within a tier like "better than average feature set in mid-range" or something akin to this -- also including whether the community's reviews stack up to a positive, neutral or negative endorsement.

Retrevo is also a sign of bigger things to come in the CSE industry -- vertical search engines specifically tailored for products used by clearly-defined audiences.  It's almost like using Game Genie on your old NES...Retrevo lets you shortcut it to the relevant stuff in the quickest way possible.

The site is powered by Yahoo! Shopping on the product search side.

Written by Scott Hurff -- scott.hurff at channeladvisor

Social shopping segment growing; Kaboodle leads the pack

Social shopping sites only receive less than one percent of Internet traffic in the United States, but the segment grew 447 percent from a year ago last week, Hitwise reported yesterday.

This is good news for the social shopping segment and some good visibility, too.

Hitwise ranked the following sites in terms of traffic volume and social shopping market share:

1. Kaboodle: 68 percent; up 200 percent from last year
2. Buzzillions: 8.23 percent
3. ThisNext: 7.23 percent
4. ShopWiki: 6.89 percent
5. Stylehive: 5.18 percent

To put this in perspective, Photobucket, the photo sharing site recently bought by MySpace, accounted for two percent of US Internet traffic with 14 million users.

Both Quantcast and Compete report Kaboodle's traffic to be about 3.2 million uniques per month.

These sites differ from traditional CSEs in that they encourage their users to create lists of items they want or already have that define their personal style.  Often, these sites will show which users are most compatible to your own tastes.

Business models mostly include affiliate fees, co-branding deals and advertising -- and possibly selling the market data they collect to outside recipients.

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.

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

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