June 28, 2007, 12:00 AM

Comparison shopping sites expand and narrow

Comparison shopping sites become more sophisticated to remain competitive.

Comparison shopping has played an increasingly important role in e-commerce since it emerged in the late 1990s. Initially, comparison shopping sites gathered pricing information from as many retailers as possible, showed shoppers where they could purchase an item at the lowest price and collected a fee from the merchant whenever a customer clicked through. And they focused primarily on easily compared products, such as consumer electronics, housewares and books.

Over the years, though, comparison shopping sites have had to become more sophisticated to remain competitive in what is becoming an increasingly crowded space. They’ve added reviews of both merchants and products, and they’re focusing not just on the lowest priced item but also on the best item that fits into a consumer’s budget. They’re also homing in on the quality of retailers’ service.

“Cheapest is not front of mind for a lot of consumers these days,” says Josh Silverman, general manager at Shopping.com, an eBay Inc. subsidiary. “We find the areas that get the clicks most often are not the cheapest. They’re the ones that have the best balance of value and trust.”

Popularity contest

Shopping.com is very focused on helping people figure out what to buy as much as where to buy, Silverman adds. It leverages consumer reviews and data gleaned from the 20 million monthly visits to the site to determine which products are most popular, posting that information prominently on the site.

What’s more, as consumers have broadened their online shopping interests, comparison shopping sites are developing and refining categories for items such as apparel, jewelry and shoes.

“When we started out eight years ago, you could see all the tech products and gadgets were always pretty far ahead of the home and personal products,” a PriceGrabber.com spokesman says. “One of the most interesting trends we’ve seen is the shift in the amount of users becoming more comfortable with the soft channels.” PriceGrabber.com has about 24 million visits per month.

Mass-market comparison shopping sites also are facing more competition from sites focusing on market segments, such as pharmaceuticals. “There are a lot of small players focusing more on niche audiences, trying to create an experience that speaks to a specific type of shopper,” says Rysa Pitner, chief marketing officer, Shopzilla.com.

One such niche site is HealthPricer.com, a comparison shopping site that lists more than 360,000 products. Comparison shopping sites that handle numerous categories of products don’t have the time or domain expertise to present information on health products in an easily digestible form for shoppers, says Michael Brown, HealthPricer president and CEO.

Crawling for health

HealthPricer crawls the web for product information and then normalizes the data-for example, product names-so products can be accurately compared. That’s a huge task the typical comparison shopping site can’t perform, Brown contends.

“When a consumer goes to a site, do they want to find the same product described 15 different ways and having two or three buying opportunities for each one,” he says. “That’s helpful, but confusing.”

These niche sites are forcing broader comparison shopping sites to create a more relevant and accurate experience on the larger scale, Pitner says.

“Much of what is going on at Shopzilla right now is really invisible to the consumer at the display level but creating a more relevant and accurate search experience,” she says. For example, she adds, Shopzilla has moved away from the merchandising focus on its home page to concentrate on search through search dialog and navigational search.

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