New York Times, September 22, 2003
More Online Comparison Shopping
| CONSUMERS have grown accustomed to using comparison shopping sites like DealTime and BizRate to figure out where to buy the cheapest computer gadgets. But will they flock to these sites to find cashmere sweaters?
|Some leading sites in this category are betting that consumers will, as the operators roll out new technologies and features aimed at attracting shoppers for so-called soft goods.
Take Shopping.com, a site scheduled to make its debut today. The site is a result of a merger last spring between DealTime, whose business was to let consumers compare prices on various items, and Epinions, which collected consumer product reviews. According to Daniel Ciporin, Shopping.com's chief executive, the new site includes far more clothes, furniture and other nontechie items than either Epinions or DealTime previously offered.
For instance, Mr. Ciporin said, Shopping.com lists about 200,000 apparel items, and will have 370,000 by mid-October. On June 1, DealTime had just 129,000. Furniture items have nearly doubled since June, to 350,000.
"Comparison shopping is moving out of the tech categories it's been concentrated on," Mr. Ciporin said. "So this is really important in attracting the mass market we're aiming for."
The process is not easy, Mr. Ciporin said, because the essence of a comparison shopping site is to present highly similar or identical items from different merchants. Stereos, computers and other electronic gear are a natural fit, since they can be compared along rigid criteria, like megahertz or watts, and because only a handful of major established name-brand manufacturers sell these goods.
But in more fragmented industries like apparel and furniture no such standards or category leaders prevail, forcing sites like Shopping.com to scan thousands of merchants carefully for items that are similar enough to satisfy comparison shoppers.
So far, the process could bear further refinement. A search for wool sweaters costing $150 on DealTime last week, for example, turned up 23 matches, including a black midriff-baring cardigan by Paul Smith (selling on Yoox.com for $347), directly above a considerably more conservative cashmere print cardigan from Lands' End (selling on its own site for $175).
When a customer clicks on a retailer's link, Shopping.com earns anywhere from a nickel to $4, depending on what retailers have bid to be included in a category's listings. Other comparison shopping sites, like BizRate.com, do not charge by the click but instead get commissions - typically 5 to 15 percent - from the sales they generate.
BizRate's chief executive, Chuck Davis, says that his site, too, is bulking up on listings of soft goods. Mr. Davis says that surveys his company regularly conducts among a panel of 600,000 online buyers show a significant gender shift. During the holiday shopping season in 1998, he said, 61 percent of online shoppers were male. Last year, he said, women accounted for 61 percent of online shoppers.
That shift has required a change in strategy as well. "We need to make sure we get softer goods, because women control the purse strings," Mr. Davis said.
BizRate now deals with 10 million items from 33,000 different retailers' databases. By November, the number of items is to reach 25 million, mostly from the addition of clothing, luggage, gifts and similar goods, the company says. Mr. Davis predicts that the product database will dwarf those of other comparison shopping sites and give the company an edge in an increasingly competitive market.
Analysts say shopping comparison sites may profit from their newfound focus on nonelectronic items, but to flourish they will require something much more elusive and costly: brand-name recognition. "Awareness of these shopping comparison engines is quite low," said Carrie A. Johnson, an analyst with the technology consultants Forrester Research. Ms. Johnson said that in a Forrester survey this year, when consumers were asked what site they used in their last purchase, only 5 percent mentioned shopping comparison services.
"Consumers don't know this information is available, so when these sites actually grab a customer, it's important for them to be broad in the number of products they cover,'' Ms. Johnson said. "But what they really need is to offer an experience that's incredibly deep. They want to get reviews, compare items side by side, see the total costs with shipping and handling."
Not that sites are ignoring such features. Pricegrabber.com, for one, has recently introduced a number of changes, allowing shoppers to narrow a search for, say, boots by the height of the heel, and sign up for an e-mail alert when that boot hits the shopper's preferred price at the shopper's preferred retailers.
But even when presented with all of these service improvements, apparel shoppers could prove a tough sell, Ms. Johnson said. Most apparel shoppers typically browse through specific brands of clothing rather than specific items. "So they're more likely to go to the portals or Amazon," which for years have assembled collections of brand-name stores.
Given the dozen or so companies competing in the price-comparison market, and the dearth of consumer awareness so far, Ms. Johnson predicted that some would inevitably vanish. "They're playing in such a small marketplace that something has to give," she said. "Not to mention that as portals come on stronger with shopping search functions, they'll be serious competitors."
Indeed, the big portal Yahoo has been quietly building shopping comparison features for items like digital cameras, and is expected to announce a number of improvements in its shopping category in the coming days. And Google - which as a search engine is typically not considered a portal but is behaving more and more like one - recently introduced changes to its shopping service, Froogle.
Froogle has been operating as an experimental service since December, and Marissa Mayer, Google's director of consumer Web products, said the company was in no hurry to take it out of test mode. "But we've seen a lot of success with it," Ms. Mayer said.
Still, Ms. Mayer said Froogle was not meant to compete directly with the conventional shopping search engines. "You can use it like a comparison shopping engine if you want, but it's really just meant to give you a sense as to whether you can even buy a certain thing on the Web, and who sells it," she said.
The existing comparison sites betray no worries about the prospect of players like Yahoo and Google entering the field. Rafael Ortiz, co-founder of NexTag, an online comparison shopping service based in San Mateo, Calif., said that the online travel market, for example, had proved to be able to sustain more than one comparison shopping service, including Expedia, Travelocity and Priceline. "We aim to establish ourselves as the leader," he said. "But what is the right number for this market? I can't honestly begin to tell you."