Channel Intelligence, Inc.
Published: July 2005
Abstract
Comparison shopping sites and portals like Shopping.com, Shopzilla, CNET Shopper, Yahoo! Shopping and others can be very effective at driving highly qualified leads to a retailer's online store. However, many online retailers fail to achieve these results due to data problems that limit the effectiveness of these marketing programs. Comparison Shopping Optimization is an ongoing process that significantly improves traffic, conversion rates and profitability from these sites – and provides the metrics to measure their success.
What is Comparison Shopping Optimization?
If a brick-and-mortar retailer flips through its Sunday circular and finds that one-third of its pages are blank, someone is going to get an irate call first thing the next morning. If the retailer realizes that some of its key products were supposed to be advertised on those blank pages, someone is going to get a really irate call that very moment. A Sunday circular would never allow itself to fail in this manner.
The same type of problem is happening every day to online retailers, but it has gone largely unnoticed. Comparison shopping sites and portals, like the circulars in the Sunday newspaper, allow consumers to research and compare products before selecting a retailer for final purchase. But in many cases, a significant number of products that the retailer chooses to display on these sites fail to appear at all or, if they do, the products may show up in a non-optimal location on these sites. As a result, the effectiveness of the marketing dollars spent at these sites is reduced, in some cases, significantly.
Comparison shopping sites attempt to ensure that their clients' products are listed properly. But with thousands of retailers and tens of millions of products available for sale, it is nearly impossible for each retailer's products to get the attention they deserve. The volume and complexity of the data is too much to handle on this scale.
For this reason, the Comparison Shopping Optimization process was created. This process ensures that every product appears in the optimal location on each comparison shopping site. The process gives control of these marketing programs to the online retailers, not the comparison shopping sites. In fact, five of the top 16 online retailers listed in the 2005 Internet Retailer Top 400 are already seeing the benefits of Comparison Shopping Optimization.
Learning from the Failures of the Past
When online retailers struggle to succeed with a comparison shopping site, these are some of the common reactions:
1. Bidding for placement to improve product visibility
2. Eliminating product categories that appear to have low traffic or conversion rates
3. Completely removing all products from that comparison shopping site
4. Trying a different comparison shopping site (go to Step #1)
The problem with this approach is that the underlying source of the problem is not addressed. Until the product data is optimized for each comparison shopping site, the retailer will never achieve optimal results with these sites.
Once the root cause is solved, however, Steps #1 and #2 above are perfectly valid techniques to promote specific products or categories. Until then, these techniques simply mask the underlying cause of the problems.
Getting to the Root Cause – Data, Placement, Search
There are three components of a retailer's product data that directly affect its success with comparison shopping sites:
- Accurate and Complete Product Data – Sending accurate product identifiers, such as model number, UPC, manufacturer name, ISBN, etc., is critical to ensure that all of the products appear at the comparison shopping sites. This is especially important for products like electronics, computers, books and video games.
- Correct Placement – Correctly categorizing products into the category tree of each comparison shopping site is necessary to ensure that the products are listed where consumers expect to find them. The retailer may decide to pay for better placement within that category, but the first step is to place each product into the correct category.
- Optimized for Search – Consumers find products at comparison shopping sites either through the navigation built into these sites, or through the product search option. Providing product data that is optimized for search will result in more consumers finding these products.
Data – The Universal Problem
Every retailer works to ensure their product data is accurate and complete, but this is a challenge in the online world. With the push for online stores to significantly expand their product catalogs, and the continuous introduction of new products, it is nearly impossible to achieve the goal of accurate and complete data for every product.
As a further complication, the data expected by the comparison shopping sites may differ from the data the retailer has in its systems. It is common for a product to be referred to by different model numbers and manufacturer names, which could lead to confusion for consumers, improper categorization of products and missed sales opportunities.
Comparison Shopping Optimization solves the problem of sending product data that is inaccurate, incomplete or simply different than the data expected by the comparison shopping site. This optimization process automatically "unifies" the retailer's product data with that of the comparison shopping site. This translation process ensures that the retailer's products appear at these sites.
Improved Product Placement without Bidding
Every online retailer and comparison shopping site places products into categories to provide an intuitive navigation method for consumers. Anecdotal evidence suggests that just over half of consumers use navigation to find products online, while the rest use search. Placing products into the correct categories is an essential online merchandising strategy. But incorrect or non-optimal placement is fairly common at comparison shopping sites due to the data being sent to these sites.
Most comparison shopping sites use Category-to-Category Mapping to place products into their category taxonomy. Simply put, the online retailer's categories are mapped to the categories of the comparison shopping sites. This approach is easy to implement, but has three major drawbacks:
- Differences in Category Detail Level – The retailer's product categories need to be at least as detailed as those of the comparison shopping site. If the retailer has a Men's Shoes category, for example, but the comparison shopping site has further refined categories that include Men's Dress Shoes, Men's Sandals, Men's Work Boots, etc., the category-to-category mapping fails to be effective.
- Inaccurate Placement on Retailer's Site – The retailer must correctly place products into its own category tree. Not every retailer has the resources to place 100 percent of its products into the correct categories on its own site. These errors will likely be reflected at the comparison shopping site as well.
- Ignoring Differences between Retailers – This category-to-category mapping approach treats all of the retailers the same. For example, a toy retailer may want to place an electronic toy such as LeapFrog into a Toys category, while a consumer electronics retailer may want the same product to be placed into an Electronics category. Retailers can capitalize on their brand identity within their target categories, but only when their products are placed correctly to take full advantage.
Comparison Shopping Optimization solves this specific problem by properly placing each product into the optimal category for each retailer at each comparison shopping site. This gives retailers more control over where their products are placed, rather than relying solely on the comparison shopping sites to handle these key merchandising decisions.
Once a product is properly placed, the retailer can then decide whether to bid for improved placement within that category. Bidding for improved placement for products in the wrong categories is usually just a waste of money.
Better Search Results through Better Data
Search engines and comparison shopping sites share a number of similarities. Each site has its own search algorithms for optimizing search results, and these algorithms change over time. In addition, the pay-for-performance search engine results are only as good as the keywords chosen, just as the search results at the comparison shopping sites are only as good as the product data sent to these sites.
One major difference, however, is that keywords are only one piece of data used in the search algorithms for comparison shopping sites. It is an important piece, of course, but the product's name, description and model number are even more important in most cases.
Comparison Shopping Optimization delivers better search results at the comparison shopping sites by ensuring that the product data sent to each site is optimized for search. This automated process may include incorporating the product-level keywords that have been created by a Search Engine Marketing (SEM) company. It also includes automated processes to ensure that model numbers are included in the product names, and other similar techniques that have proven effective at each of the comparison shopping sites.
Implementing Comparison Shopping Optimization
The primary reason that most online retailers have not implemented the Comparison Shopping Optimization process within their own IT infrastructure is because a homegrown solution can be cost prohibitive. It requires extensive knowledge of each comparison shopping site, complex data algorithms, and measurement tools to continuously refine the process.
By outsourcing the Comparison Shopping Optimization process to a third party, online retailers have found they can gain control of their marketing programs with the comparison shopping sites. More importantly, the ROI for outsourcing this process is excellent – often with a payback period of less than three months.
More online retailers are using a third party for data feed management, whether it is their SEM company, the service provider for the retailer's eBay or Amazon store, or data specialists such as Channel Intelligence.
When it comes to the Comparison Shopping Optimization process, however, Channel Intelligence is the exclusive provider of this service and has been issued a patent to protect this exclusivity. This powerful combination of data feed management, Comparison Shopping Optimization, and measurement tools has helped online retailers of all sizes and markets to achieve success using comparison shopping sites.
Commerce Data Syndication
Channel Intelligence offers its Commerce Data Syndication service to online retailers as an outsourced solution for improving performance with the comparison shopping sites. This service provides retailers with complete control over the merchandising and promotion of their products, while allowing them to forget about the day-to-day operational details of product data feeds.
Retailers simply deliver their online product catalog to Channel Intelligence each day. The data is continuously optimized and syndicated based on predefined business rules. Channel Intelligence can even syndicate a retailer's local store data to drive traffic to their brick-and-mortar stores.
Any successful outsourced solution has to provide flexibility and control to the client. Channel Intelligence has built Commerce Data Syndication with this in mind. Adding a new comparison shopping site or changing business rules simply requires a quick e-mail or phone call to an assigned Client Services representative. No more programming requests to an IT team, or manual changes with a third-party solution. Retain complete control without having to do the work.
All of the following features are included in this service:
- Complete Data Feed Management – The retailer simply needs to deliver a daily data feed to Channel Intelligence. All of the day-to-day management and optimization of the feeds is handled automatically.
- Success Measurements – Detailed tracking and reporting is in place to allow the retailer to measure the success of its marketing program from the macro level down to the partner, category and product level. The robust data includes traffic statistics and conversion rates. Product-level profitability analysis will be available shortly.
- Comparison Shopping Optimization
- Data Optimization – Using a patented process, the retailer's product data is optimized for each comparison shopping site to ensure that more of its products appear at the site and in the ideal location. This process will automatically improve the product identifiers sent to each site to match the identifiers expected by that site.
- Optimal Product Placement – Each product is placed in the correct category at each comparison shopping site. This process ensures that the products are located in the categories where the retailer's customers expect to find them.
- Search Optimization – Product-level keywords from an SEM company can be easily incorporated into the product data sent to the comparison shopping sites. Automated rules may be defined to improve the product names and descriptions using other attributes in the product data.
- Business Rules – After reviewing the detailed tracking and reporting included in Commerce Data Syndication, retailers may define business rules to take action on this information. For example, products or categories that are converting poorly can be suppressed from a site.
With the most complete data feed management solution available and the exclusive Comparison Shopping Optimization process, Commerce Data Syndication provides complete control of comparison shopping sites to the online retailer.
Measuring the Success of Comparison Shopping Optimization
Commerce Data Syndication helps retailers achieve their goals with regard to using comparison shopping sites. Here's how:
- Reducing IT Costs – Data feed management can be expensive to create and support internally, so outsourcing is an excellent alternative that can significantly reduce costs. Channel Intelligence has already built the infrastructure and the relationships with the comparison shopping sites, so the cost of this service can be substantially lower than a homegrown solution.
- Increasing Traffic – Products that do not appear at comparison shopping sites simply don't get any traffic. The Comparison Shopping Optimization process ensures that the retailer's products appear at these sites. The result is increased traffic, which in many cases can be significant depending on the popularity of the missing products.
- Improving Sales Conversion Rates – Poorly placed products tend to have poor conversion rates, so optimizing product placement will improve those conversion rates. Business rules may be easily defined to suppress specific products or categories with lower conversion rates. By focusing marketing dollars on products that convert into sales rather than on products that just get traffic, the effectiveness of the marketing program will improve dramatically.
- Focusing on Profitability – For retailers focused on profitability rather than sales, product margin and product-specific marketing costs can be incorporated into the product profitability analysis. Products (or categories of products) that are not profitable to promote at a comparison shopping site can be suppressed from that site, thus increasing the profitability of the marketing program.
Most importantly, the robust tracking and reporting tools provide the metrics needed to measure success. This is the ultimate level of control that online retailers seek. Eliminate the guess work and know exactly how their marketing programs are doing, and have the ability to take action on that information.
Next Steps
For more information on the Commerce Data Syndication service from Channel Intelligence, or the Comparison Shopping Optimization process, please contact a Channel Intelligence sales representative at:
Phone: +1 321-559-2300 x2393
E-Mail: retailsales@channelintelligence.com
Click here to learn more about this solution.
Channel Intelligence can provide a free data feed analysis to show specifically how Commerce Data Syndication incorporates the Comparison Shopping Optimization process to improve results at a selected comparison shopping site.
