The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
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"There are certain shoppers who shop through comparison shopping engines and are loyal to them," says Lori Gatto, senior online marketing manager at Onlineshoes.com. The e-retailer uses Channel Intelligence to manage its feeds to 13 shopping engines. Those engines generate 12-13% of the company's sales, and about three-fourths of the shoppers who come from those engines are new to Onlineshoes.com, she says.
But e-retailers must balance customer acquisition and profitability. Moosejaw doesn't include any products under $50 because the click fees would eat up profit margins, says Comerford.
Recognizing that merchants rarely send all their products to comparison shopping sites because of the pay-per-click model that makes some items unprofitable, some shopping engines have emerged with different pricing models aimed at encouraging merchants to send more products.
Instead of a pay-per-click model, TheFind charges retailers only when the consumer makes a purchase. And that pay-per-acquisition approach applies only to retailers that feed data to TheFind via such affiliate networks as Commission Junction and LinkShare.
Some retailers get free clicks from TheFind.com. In order to offer the widest possible selection to consumers, TheFind crawls 500,000 retail sites, collecting product data and prices so it can offer over 400 million products, which it claims makes it the world's largest shopping center. If a consumer clicks on an item TheFind displays without an affiliate relationship with the retailer, the shopping site gets no fee; 65% of clicks from TheFind.com generate no revenue for the company, says CEO Siva Kumar.
But TheFind, which launched in 2007, is attempting to woo retailers to participate actively by steadily adding features, such as displaying security seals and product reviews. It recently added direct feeds that enable merchants to provide their latest pricing and product information.
Another important newcomer with a cost-per-acquisition pricing system is Bing Cashback, the shopping service from Microsoft Corp.'s Bing search engine that lets retailers specify how much of a rebate they will provide consumers who buy products through Cashback.
Introduced in May 2008 with the new Microsoft search engine, Bing Cashback generated considerable consumer attention last summer when Microsoft doubled the retailer's rebate—so a 10% Cashback offer turned into a 20% rebate—which boosted traffic to Bing Shopping by 169% in the first week it was offered, according to web measurement firm Hitwise.
SortPrice.com offers yet another pricing model—a flat monthly fee that ranges from as little as $150 for merchants that list up to 1,000 products to $650 for 50,000 products in a listing that carries the retailer's logo. SortPrice also offered a perk for merchants that pay to list on its site: it provided a free feed to Facebook that allows participating retailers to display wares on the social network and generate clicks back to their e-commerce sites. That Facebook store is generating 500 sales per month for Equestrian Collections, an online-only retailer of apparel for horse-riding enthusiasts, says president Chris Duggan.
The shopping engines clearly are working harder to get retailers' business, says Dillon of Dillon Chemical. He reports that one engine called recently offering free customer reviews software and another suggested he send a larger logo. "The engines are reaching out more frequently, trying to add more bells and whistles so you'll spend more money with them," he says.
That's a sign of the pressure from Google Product Search, which sends a lot of traffic to retail sites at no charge. As long as Google remains free, retailers can expect more ardent wooing from the other comparison shopping sites.